Using a Major Credit Card to Purchase Retail Gift Cards Online

[SOGGIE]

I'm thinking of purchasing various retail gift cards online from both target.com and walmart.com using Amex, Discover iT and BOA CR.

For those of you who used major credit cards to purchase retail gift cards online, were these transactions coded as a cash advance?

Thanks in advance for all responses!

[MoneyBurns]

Hi Soggie,

No, when you purchase a gift card from a retailer it is coded as a purchase. Enjoy the cash back and the gift cards!

[Anonymous]

To echo Sabre, gift cards from retailers generally code under the same merchant code that shows for any purchase from the same site - gift card from the grocery store shows the same as if you purchased eggs & milk.

That being said some retailers will not let you pay for a gift card with a credit card. Target does this & I'm sure others do too, I can't tell you how many times I had to come up a register for a customer requesting to speak to a manager because they didn't like /understand /believe the cashier about the no credit gift card purchases.

They do this (ostensibly) to help limit fraud with people using stolen cards to load gift cards & prepaid debit, but I strongly suspected it is also to help cripple people using the gift card purchases to manufacturer spend on credit cards to meet signup bonuses & obtain extra discounts they otherwise wouldn't get due to card restrictions. While neither is technically illegal (usually) the practices are heavily frowned upon by card issuers.

I once had to fire several of my target employees after it was discovered they were buying target gift cards with their bank issued debit card in order to be able to pay for things in store & do so with their employee discount, as target doesn't let employees get their 10% discount if paying with a non-target credit or debit card. This is how much some companies dislike getting around usage restrictions, I was forced to fire someone using their much lauded & promoted discount perk because the company wasn't getting interest on their swipes or wasn't getting the statistically larger spend that comes when people use the target debit card with the 5% discount. Not saying I think you're trying to manufacture or game the system but just thought you should be aware that you can face AA if a card company thinks you are.

[SOGGIE]

No game. But I mentioned purchasing online as opposed to in-store. I'm more interested in purchasing eGift (emailed) cards for special occasions. Purchasing online would allow using credit cards.

[UncleB]

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@SOGGIE wrote:

No game. But I mentioned purchasing online as opposed to in-store. I'm more interested in purchasing eGift (emailed) cards for special occasions. Purchasing online would allow using credit cards.

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You'll have no problems with the charges coding correctly, but if you plan to buy egift cards (email delivery) you might run into issues with your orders being canceled (especially with walmart.com). 

Walmart.com's fraud algorithms are really sensitive to online gift card orders... there are many threads on various forums where people had issues trying to take advantage of an Amex offer back in July for walmart.com.  What many experienced was they'll take the order - and put a hold on your credit card - only to summarily cancel the order a few minutes later. 

You might be able to overcome this if it happens (I think there's now a phone number in another thread) but IMO it's not worth the hassle.  As an alternative, I have found that Amazon is generally no-drama.

[Anonymous]

Yes, you can defintely purchase giftcards online with a cc, as a normal purchase, either at a discount (go to giftcardgranny.com to find the best price), or "new" from lots of places such as giftcards.com