My Merchant Account Blog

Using and Accepting Gift Cards

Thursday, April 09, 2009

Just a few years ago, you bought a gift card for a specific company, i.e. BlockBuster, Best Buy, even Wal-Mart.  Then the card associations allowed issuing banks to issue gift cards with the card association logos on them.  this allowed the person who was receiving the gift to use the card almost anywhere. 

Let's say you received a gift card that had the American Express logo on it.  This means that you could use the gift card anywhere that was displaying the American Expression logo - from buying groceries at your favorite shopping market or buying music from the online e-commerce store.  This made it easier on the giver - he / she could easily buy a gift card with a card association logo on it, eliminating the need to force the recipient to go to a specific location.

Using the Gift Card as a Consumer

These gift cards though do come with some more responsibility though.  On the back of the card, you should find a toll free number.  For American Express gift cards, the toll free number (in the United States) is 877-297-4438.  Once you enter the 15-digit credit card number, along with the 4-digit Card Identification Number (CID) found in the upper right corner on the front of the card, you will be told your balance.

After you are told the balance, listen for the other information.  Option 5 should be for all other questions.  This will direct you to a customer service representative.  At this point, you can give the representative your name and address.  This will then help you use the card on websites that use Address Verification Service (AVS) as a starting point as a way to prevent online fraud.  Merchants rely on AVS to help check the validity of the transaction.

The next thing, you as the consumer needs to know, is the balance on the gift card.  If your balance is $9.81 but you are at the store buying goods that total $18.76, you need to let the cashier know to authorize $9.81 on the card.  Once that sale is complete, the cashier will then ask you for $8.95 - which you should be able to pay with cash, a credit card, or another gift card.

Accepting the Gift Card as a Merchant

As a merchant, you should not need to do too much to accept the gift card from from one of the card associations.  Your shopping cart should allow the option for the consumer to enter an amount to authorize.  If this amount is lower than the total, that amount should be displayed once the first amount is authorized, allowing the consumer to complete the sale.

If you rely on AVS as a stepping stone to help prevent online fraud, you might want to contact your electronic payment gateway and merchant account provider to see what they support.  I know that I have always stressed using AVS as the first step to help prevent online fraud, unfortunately though, unless the consumer has registered the gift card with the issuing bank, you might be unable to rely on this service.

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