January 29, 2023

La Ronge Northerner

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Pay $30.69 to buy $25 | Pres

As a token of love, it’s done better than gift cards. But sometimes it can be a more appropriate gift.


With this in mind, I went to the pharmacy to avoid paying the check and looking old fashioned. A question of giving maximum latitude to its recipient, I chose a Visa card with beautiful candles and “The Perfect Gift” on the packaging. It can be Mastercard or American Express.

At the checkout, the person in front of me was holding four copies of the same product. I asked because he didn’t seem to understand his bill and the cashier explained it to him. This is how I found out that each of his $25 prepaid “credit” cards came with a $4.95 “acquisition fee”. Taxable charges. Alas!

In retrospect, I also learned that a $3 “monthly maintenance fee” will be deducted if the recipient takes too long to redeem their gift.

So not only does a $25 card cost $30.69, but its balance may eventually melt like ice in the sun. All alone. To avoid this situation, the card must be emptied within 12 months of purchase.

Some cards are more demanding. MasterCard’s Joker allows the buyer to choose the size of the gift ($25 to $200) and charges an activation fee of $7.95 plus tax. Visa joker (between $200 and $500): $9.95 fee.

  • Prepaid credit card

    Photo by Oliver Jean, The Press

    Prepaid credit card

  • MasterCard Joker Card is an example

    Presented by LPC Advocates

    MasterCard Joker Card is an example

  • Prepaid credit card

    Photo by Oliver Jean, The Press

    Prepaid credit card

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Complicating business is that activation (or purchase) and monthly maintenance (or inactivity) fees are prohibited on cards that can be used at a business such as McDonalds, Simons or SAQ.

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However, cards that allow purchases at multiple locations, including those issued through shopping centers, are not subject to this rule. Consumer Protection Act (LPC). And in the case of free gift cards, in the case of promotions, for example, there are no rules.

These exceptions confuse consumers.

Charles Tanguay, a spokesman for the Office of Consumer Protection, summarized, “Financial institutions can charge whatever fees they want as long as cards are clearly disclosed before purchase. The same logic applies when it comes to expiration dates. Visa and MasterCard gift card funds do not expire and can be transferred to another card by calling customer service.

Class Action Claim

According to Montreal firm LPC Avocats, although their execution fees are legal, these cards are problematic. Because the displayed price “must include the sum total of the amounts payable by the consumer” and it “must be more clear than the aggregated amounts”.

Me Joey Zukran also filed a request for authorization to institute a class action last fall. To avoid misleading customers. In the US, some retailers such as Walmart display all-inclusive pricing.

Screen capture from Walmart website

In the United States, Walmart displays prices online that include card activation fees.

The CPA also prevents merchants in Quebec from demanding higher prices than advertised. Therefore, under the price accuracy principle, Me Zukran rules that consumers are entitled to claim $10 as a classic pricing error.

Its move targets a long list of retailers including Couche-Tard, Jean Coutu, Walmart, Canadian Tire, Pharmaprix, Best Buy and Dollarama, as well as Visa, MasterCard, American Express and People’s Trust.

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At first glance, these cards are very convenient to use almost anywhere. How much can a teenager without a credit card buy online at Amazon?

But they come with usage restrictions.

Some gas stations refuse them. Restaurants and hotels may charge a fee for transactions.

Merchants also have the right to refuse extracted transactions. In other words, a $100 card holder cannot use it for $150 shoes.

When traveling within the Eurozone, the maximum authorized spend per transaction is limited to CAN$75, refer to Joker Cards and The Perfect Gift sites. On the American Express side, gift cards are only accepted in Canada and the United States.

To the latitude I mentioned above, we will return.

Good old check and cash may not be as pretty as prepaid “credit” cards, but at least they won’t cause any nasty surprises.