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Of course, it costs money to create these cards, build out the tech stack behind them, deal with fraud monitoring, etc. I am sure many millions were spent on th
by rsj_hn 5y ago
Of course, it costs money to create these cards, build out the tech stack behind them, deal with fraud monitoring, etc. I am sure many millions were spent on this and continues to be spent on it, yet the gift card is free. You don't need to pay an extra penny to use the card. That's paid for by people who don't redeem all the value on the cards as well as the spread between payment and redemption, so someone must have run the numbers and decided whether building this infrastructure is worth it.
- conjecTech 5y agoIt's probably paid for by the better fee structure on payment processing: credit card processing is generally a base fee + a percent of the purchase. By having people put $20 on a Starbucks card once rather than making 5 different $4 transactions, they reduce the fixed charge they incur by 80%.
- rsj_hn 5y agoThat's another good point, I didn't think of that cost reduction.