Office Depot $500 AMEX gift card?

[Moishebatchy]

They pay amex a full $500 for the card? I always assumed they paid a reduced amount

And what, exactly, does Amex/InComm/whoever gain by this whole fiasco, then? It's one thing to give a reduced price on a store-specific card - it's worth it for the store to take a small hit, so as to attract customers. But this stuff is straight-up cash. How could it possibly be worth it for them to take a loss?!

[Moishebatchy]

I am an actuary so i know what actuaries do, and it does not involve determining the simple price an item should be when the exact cost is know. If the CC processing fee was a variable amount then it would be an actuarial calculation. This is simple arithmetic that anyone with a calculator can do.  It's on the people who set the prices. To be fair it's not the accountants either, probably on either the marketing team or product development team or some other airhead who didn't think past the top line. Believe me, I see it all the time when people say, it's worth the short term loss to get the business.

Except it IS an actuarial calculation, as you have to weigh the people who max out the reload/GC at $500, against people who only load $50 (and any amount in between) while paying the same $3.95 (in which case, they DO make money). THAT part is variable.

[Moishebatchy]

I am going to go out on a limb here and say that OD did not have an actuary look at the VR situation.

אה, באמת?

[Ergel]

And what, exactly, does Amex/InComm/whoever gain by this whole fiasco, then? It's one thing to give a reduced price on a store-specific card - it's worth it for the store to take a small hit, so as to attract customers. But this stuff is straight-up cash. How could it possibly be worth it for them to take a loss?!

Because they are guarunteed 3% processing fees, plus the actuarial percentage of people who won't ended up using the gc's

[yossi4k]

All office stores pulled them.

All $500 GC were pulled including visa and MC.

Staples and OfficeMax never had the $500 gc's
According to the manager at OD its the variable aspect (20-500) of the $500 gift cards that are hard to track when there was fraud involved. Not sure why they don't just make 'fixed' $500 gift cards like $200, $100 etc..

[Moishebatchy]

According to the manager at OD its the variable aspect (20-500) of the $500 gift cards that are hard to track when there was fraud involved.

I call BS on that.

[robi]

Staples and OfficeMax never had the $500 gc's
According to the manager at OD its the variable aspect (20-500) of the $500 gift cards that are hard to track when there was fraud involved. Not sure why they don't just make 'fixed' $500 gift cards like $200, $100 etc..

stop and shop told me the exact same thing, and they'll only sell fixed rate GC with CC. Having said that...

I call BS on that.

[CountValentine]

אה, באמת?

Yes, really. 

[noturbizniss]

Except it IS an actuarial calculation, as you have to weigh the people who max out the reload/GC at $500, against people who only load $50 (and any amount in between) while paying the same $3.95 (in which case, they DO make money). THAT part is variable.

touche. I was lazy and did not read the whole thread - i was thinking about the fee for flat $500 gc.  Given that the gc amount is VARIABLE, then it is a basic calculation depending on what the average spend is.  The assumption must have been that people will not be putting $500 on it, probably assumed the $3.95 would be enough to cover the processing fee.
That's when the real world comes in and you have to weight other factors such as behavior (i.e. once i'm paying for it i might as well put more on it - similar to deductible leveraging)

[yossi4k]

Sighted $500 gc's at Michael's. Anyway to take advantage?

[Saver2000]

Sighted $500 gc's at Michael's. Anyway to take advantage?

Advantage of what?

[Moishebatchy]

Sighted $500 gc's at Michael's. Anyway to take advantage?

Wait for a Freedom bonus?

[yossi4k]

Wait for a Freedom bonus?

Wasn't one of their categories last year or this year

[Saver2000]

Sighted $500 gc's at Michael's. Anyway to take advantage?

Visa/MC, or amex?

[yossi4k]

Visa/MC, or amex?

visa

[robi]

 stop and shop has plenty of 500$ GC