Gift cards are often seen as the perfect, convenient present. Recently, a friend gifted me a Visa gift card, a re-gift actually, and I thought, “Great, easy money to spend!” It was a $25 card, and I planned to use it later, maybe closer to my birthday. Big mistake.
When I finally tried to use the card at a store, it was declined – not once, but three times! Confused, I checked the balance and discovered the $25 card was now worth only $16. A whopping $9 had vanished! I immediately called the number on the back to investigate these mysterious charges. Turns out, it wasn’t fraud. Instead, I was hit with monthly “maintenance” fees, a sneaky way for prepaid card companies to bleed your gift card dry. Even more frustrating, one of these fees was charged after I received the card, despite never having used it.
The Prepaid Visa Gift Card “Scam” Explained
Here’s the catch: these prepaid cards, while branded with Visa or Mastercard, are not the same as regular gift cards. This difference is crucial because gift cards have regulations protecting consumers from unexpected fees and expiration dates, especially in places like Ontario, Canada, where I am. Prepaid credit cards, however, are categorized as bank cards, falling under federal regulations which, shockingly, offer little to no control over these kinds of fees. It’s a classic case of “buyer beware,” but who reads the fine print on a gift card in a rush at the checkout?
While technically legal because the fees are disclosed (somewhere in tiny print), it feels like a scam. Here’s why these “maintenance” fees are so problematic:
- Exorbitant Monthly Fees: After just 12 months of inactivity, a $3 monthly “maintenance” fee kicks in, regardless of the remaining balance. On my $25 card, that’s a 12% fee each month for simply holding onto the card. An annual fee might be somewhat understandable, or fees starting after a longer period, but monthly fees after only a year are excessive and predatory.
- “Funds Do Not Expire” – A Deceptive Lie: The card boldly states “Funds do not expire.” Technically true, but misleading. My card would have been completely depleted by August due to these fees, long before any “valid thru” date printed on the card. It’s a joke to claim funds don’t expire when they are systematically siphoned away by fees.
Don’t Get Trapped: How to Avoid Prepaid Visa Gift Card Fees
Consider this my warning: If you have a prepaid Visa or Mastercard gift card, especially those common ones you see at drugstores or grocery stores, check the balance immediately. If it’s been less than a year since purchase, the full amount should be there. But after 12 months, those fees start eating away at the value.
And if you’ve given these as gifts, give the recipients a heads-up! It’s your money that purchased the card, and no one wants their gift to dwindle away due to hidden charges.
My personal takeaway? I will never buy a prepaid Visa gift card again. If I receive one, I’ll use it right away or exchange it for a store-specific gift card that doesn’t come with these ridiculous fees.
Lesson learned. While my $9 loss wasn’t huge, it highlighted a sneaky practice that can significantly devalue gifts. These cards might be marketed as “The Perfect Gift,” but “The Perfect Scam” feels more accurate. Look for No Fee Visa Gift Card options or stick to traditional retailer gift cards to avoid these hidden traps.
