eGift card Load & Processing Fees

[Plantsylancey]

We recently received a refund on January 16th for incorrect charges applied to eGift card transactions made through our online store. This is the second time this has happened—the first being on July 3rd—which, at the time, was attributed to the poor rollout of the changes in eGift card fees in March 2024.

I’m still seeking clear clarification on this issue, as a recent eGift card transaction was included in our latest payout, and the fees seem incredibly high. After reviewing Square’s explanation of eGift card fees, I am even more confused. Below is the wording from your website:

“With eGift cards, you pay a 2.2% processing fee when your customer buys an eGift card from you through your online order page and a gift card load fee of 2.5% of the amount loaded or reloaded.”

Can anyone explain why there are two separate percentage-based fees outlined above? If a customer purchases an eGift card, the 2.2% processing fee is already calculated based on the transaction value. Why, then, is an additional 2.5% gift card load fee applied to the same value? This appears to be double-dipping.

Using a recent payout asa an example:

•Customer purchased a $50 eGift card.

•“Fees” listed: $1.82

•“Gift card load fees” listed: $1.14

•Total fees charged: $2.96

•This equates to 5.92% in total fees, which seems excessive.

Looking forward to getting some clarification on this

[Laurie_ · Accepted solution]

Hi @Plantsylancey,

Thanks for reaching out!

We apologise for any inconvenience caused by incorrect eGift Card charges. Square will promptly notify Sellers of any adjustments or corrections to processing fees. If you ever have questions about a communication from us, feel free to ask—we’re happy to clarify. 

You're correct about Square's eGift Cards. They involve two separate transactions: one when a customer buys the eGift Card and another when the recipient uses it. Each transaction processes card information separately, incurring a fee. Since the initial purchase of the eGift Card is made with a standard payment method, Square's standard card processing fees apply. When the eGift Card is redeemed, the Square Point of Sale system treats this as a secondary transaction, where the eGift Card number is loaded within the system.

Processing and load fees cover the administrative, operational, and processing costs associated with each transaction.

Hope this helps to address your concerns! 🙂