Much of the Conventional Wisdom has held that CVS must have been losing tons of money from credit card fees and finally decided to stop the bleeding once and for all.

Why did they actually increase the daily limit late in the game? And why do they continue to this day to sell many third-party gift cards with a credit card, even Vanilla Visa cards? It seems incredibly unlikely that any store would be willing to carry a large amount of product at such a horribly low margin. Depending on the credit card used, merchant fees and related expenses will tack on somewhere between 1.

Of course, none of these cards have any purchase fee at all. Otherwise no one would buy them, right? How is CVS and every other store making money off all those gift cards? Is this a giant game of Pay It Forward? Most people have heard of a loss leaderwhich is when a retailer deliberately sells a product at a loss in order to entice people to come in and purchase other items at the store that will make up the loss. As an example, Walmart regularly prints a Black Friday newspaper circular advertising prices on electronics and the like that are so low that they must be insane!

Wait, sorry, I got caught up in the marketing. But what else do you always see along with the crazy low prices in those Walmart advertising circulars? So what did CVS do when they were selling Vanilla Reloads by credit card, theoretically at a loss?

This is not loss leader behavior. They were making money on those Vanilla Reloads, folks, along with all the other gift cards. Same goes for prepaid Visa cards — Incomm will make the money back via breakage and swipe fees. Either the amount of fraud started to outweigh the profits they were making, or Incomm decided to change the margin structure on Vanilla Reloads and other related cards, thereby making it unprofitable for CVS to continue bforex ltd credit card fees on those sales.

Other times he takes the opposing position just to see if the original argument holds water.

Devil's Advocategift cardsManufactured SpendingOff Topic. The gift card providers know that a certain percent of the cards get lost, ate up with fees or left with.

Secrets To Making Money Churning Discounted Gift Cards

Ever notice how costco sells gift cards below face value. They can because of the low number of credit cards how much money do petroleum geologists make for purchase and how to make money selling walmart gift cards take less profit. You can put a thousand on a kiosk that takes up a square foot or three.

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Gift cards are a good deal with just the fee. From my exposure working at retail clients, financial products were absolutely how to make money selling walmart gift cards best performing parts of any store impulse buy, low square footage, breakage, no shrinkage, low mechandising costs.

So where can we go that we make less of a dent…? Great post and great discussion……I think Erik nailed the nuance of the Incomm CVS discussions……. VRs were NOT CCs or DCs that could be used willy-nilly or on the go.

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Think about how many cards are on the gift card rack. Now think about how much real estate that rack requires. What else are you going to use that space for?

Of course my numbers on that point are just for demonstration as I noted. They could be very close to break-even given sq.

Disappointed with the post. Talks about how much InComm gets to keep and how much do they pass along to the retailer.

There was also a talk about it on FT. You should have incorporated all of that in here.

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Just like everything else Devils Advocate writes, it is glorified garbage. My suggestion would be if you are going to post about a subject then you should get some facts on the subject so you can provide some real data. Maybe ask a store manager as to how they make money on a gift card. Nothing you buy is going to be at a negative margin, or anywhere close to it, outside of the holiday timeframe.

Please tackle your final question in a upcoming blog? I am curious what WM gets out of free BlueBird banking.

WM still gets reimbursed by Amex for BB loads in my opinion. Amex hopes to make money thru swipe fees when those customers use their BB cards at merchants. Cost of doing business. I agree that CVS probably gets more than just the purchase fee, but how does the card issuer make money?

The card issuer whose card you use to buy the gift card? They make money no matter what you buy.

They collect a percentage of the purchase and sometimes a small minimum fee. This is split between the card issuer e. How To Make Money Selling Walmart Gift Cards How To Walmart. How To Make Money Selling Walmart Gift Cards bv. Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been approved or otherwise endorsed by any of the entities included within the post. All content unless otherwise noted is the author's alone and not provided or commissioned by any other entity.

This site is for entertainment purposes only. Articles are of a general nature and should not be relied upon for individual circumstances. Travel Codex Your Resource for Better Travel. How Does CVS Make Money Selling Gift Cards? Do Grocery and Drug Stores Adore Subway? Where Does The Profit Come From? Now, free Bluebird loads at Walmart? Write a blog Bruce Wayne and see how many hits you get……. Sorry, I meant the issuer of the gift card or the reload card. Popular Topics Airport Lounges Alaska Airlines American Airlines American Express Award Travel Chase Contests Delta Air Lines Devil's Advocate Discounts Elite Status Hilton Hotel Reviews hotels Hyatt Off Topic Starwood Strategy Trip Reports United Airlines.