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>has to pay you interest at the benchmark rate (or BM - 0.25%, something small). Deposit accounts at most banks pay you less than that, so it's unclear why you
by gruez 10mo ago
>has to pay you interest at the benchmark rate (or BM - 0.25%, something small).
Deposit accounts at most banks pay you less than that, so it's unclear why you'd want gift cards to pay that much. Not to mention that turning gift cards into essentially bank accounts is going to create even more issues. Remember how we have to remind people how paypal isn't a bank? Or how would you calculate income taxes from the interest?
- moooo99 10mo ago> Not to mention that turning gift cards into essentially bank accounts is going to create even more issues. Remember how we have to remind people how paypal isn't a bank? I would have thought the intention with such regulation as proposed by the original commenter would be that apps specifically stop offering such functionality?
- gruez 10mo agoThen why not just ban gift cards outright?
- mulmen 10mo agoBecause they’re useful and well liked by consumers?
- lxgr 10mo agoWho actually likes gift cards, as in, would still use them despite better alternatives existing? If giving/receiving cash wasn't already illegal or socially unacceptable, gift card issuers would have started lobbying for that yesterday. Other than that original use case, many people use them as a form of poorly functional digital cash (since it's not fungible across issuers) that really ought to exist natively in a currency these days.
- deleted 10mo ago[deleted]
- compsciphd 10mo agoI regularly got dunkin donuts, starbucks and the like gift cards for less the face value (sometimes half of face) and therefore strongly preferred using them when I shopped at those stores (at least when I had a balance).
- NewJazz 10mo agoBanks provide services that people want. Gift cards are for people who think it is tacky to gift cash/check but for some reason find plastic less tacky than paper. Income taxes are easy. 1099-INT. Your bank gives you one, your brokerage gives you one, and your escrow account gives you one.
- gruez 10mo ago>Income taxes are easy. 1099-INT. You think people are going to diligently collect all the 1099-INT forms for all the cards scattered around the house? If you forgot about a gift card, are you suddenly a tax evader?
- dsr_ 10mo agoOther direction: the entity giving you the income is responsible for supplying the 1099-INT statement in January. That said, they could be required to supply a copy electronically directly to the IRS and the IRS could calculate your taxes for you. Change the responsibility for correctness from the taxpayer to the government, and offer an incentive to catch a mistake.
- gruez 10mo ago>Other direction: the entity giving you the income is responsible for supplying the 1099-INT statement in January. How does that work when gift cards aren't registered to anybody, and can be transferred between people without the issuer knowing about it?
- NewJazz 10mo agoOK fair enough
- Workaccount2 10mo agoThe goal is to kill those payment schemes which mostly exist for exactly the reason I laid out. Sell a product for $7 but only allow "recharge" in $5 increments. It pretty much guarantees that you will have tons of accounts with random dollar amounts laying around in them, never to be used. Even for regular gift cards, the counter party would be beholden to honoring them at their full value, as they should. Besides, nothing it stopping you from rolling monthly treasuries and using those as a bank. Something people with enough money to exploit this proposed "gift card bank" would almost surely already be aware of.
- stouset 10mo agoWouldn’t it be better to try to kill those payment schemes directly?
- lxgr 10mo agoOn the other hand, microtransactions are horrendously expensive due to fixed per-transaction fees (at least using credit and debit cards), so some business models are simply not viable without stored value cards or accounts.
- Workaccount2 10mo agoIt's totally viable and trivially possible to just payout earned interest to these accounts. You can still issue giftcards, it's just no longer passively profitable to do so.
- lxgr 10mo agoIt's probably nontrivial anywhere interest income is taxed, but even more so in the US with its non-flat interest tax scheme (it's taxed as ordinary income at the federal level, with an income-dependent rate).
- wbshaw 10mo agoI don't understand why you couldn't just use up the balance and then pay the balance due via another method. I do it all the time. I believe the real scheme is how many gift cards never get redeemed at all.
- samrus 10mo agoIts not supposed to generate revenue, its supposed to shift the cost to the corporarions that are abusing this loophole, and hopefully lead to them not abusing it in the future. Like how high taxes on cigarettes arent meant to make money, theyre meant make smokers pay for burdening the healthcare system and society with their vice, and hopefully make it prohibitively expensive for them to continie doing it, or for someone new to start