Card brand issues ‘no fee’ gift card in Canada
Partnership with Canadian retailer Shoppers to sell gift card.
American Express claims its new gift card will be a “game changer” for the Canadian market, as the first general purpose gift card that is completely fee-free for the recipient.
Amex says the card will bring pressure on issuers of rival Visa and MasterCard gift cards to also eliminate back-end fees in order to compete.
Credit card gift cards are exempt from gift card legislation passed in Ontario in 2006, which banned expiry dates, limited fees and increased consumer disclosures on most retail gift cards.
Unlike other general purpose gift cards, Amex’s products have no after-purchase fees that erode the card’s value over time.
The purchaser pays an upfront charge, but there are no fees to check the balance, no service charges, no costs for card replacement and no expiry date.
The purchaser’s initial loading price ranges between C$4.95 and C$6.95, depending on the card’s value of $50, $100 or $200. Amex says that pays for it to supply the card and provide free replacements for lost or stolen cards.
Gift cards from Visa and MasterCard have initial loading prices and other service charges that generally apply after six months, in addition to replacement fees for lost or stolen cards.
A recent study by Deloitte and Touche predicted that gift cards and certificates would be the number one gift for Canadians this Christmas.