re: Cashier wouldn't let me buy a gift card at the grocery store with a credit card

quote:

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I know that it is a loophole.

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How is it a loophole? There is no loophole. You get 6% at grocery stores. Grocery stores sell gift cards. So you should get 6% on that.

The only (correct) answer here is:

1) Fraud
2) Stores lose money on selling you GCs. They have to pay AmEx (and DC) 3% of each transaction. (2% for VISA and MC) When loading/buying GC - say you bought a $500 gift card, the vendor is paying $15 for that transaction while only getting a % of the $3.95-$5.95 activation fee. For vendor gift cards the store may not even get that much. The gift card aisle is completely 3rd party. The 3rd party only pays the vendor for the rights to stock their GCs in their store and maybe a small % or fixed cost to process their transactions. In short: Huge loss for vendors. Gift cards are meant to be loss leaders for grocery stores. When the loss on selling GCs starts becoming significantly high, store manager will stop allowing credit cards for purchases. This is why the no CC policy is usually not hard coded at the register.