Jimmy Theis

JAN 1, 2013

The Pain of Prepaid Gift Cards

Over the last year or so, I've been given a few prepaid gift cards as rewards and presents. The ones I've received have all been Discover and American Express cards, but I imagine the problems I've had are not just limited to these two types.

If you haven't seen them before, the cards look something like this (image from American Express):

I do most of my shopping online, so I have often tried to use these cards on web stores (specifically Amazon), with very little success.

Because online stores require you to enter so much information (billing address, billing phone, name on card, etc.), it seems almost impossible to get the right combination of data that will let the card go through. Sometimes, the billing address needs to be that of the person who originally ordered the card; sometimes the name does too.

Amazon (and probably other stores) often authorize the card at a later time, so I've ended up in this weird crisis situation where my order is being processed, but my payment hasn't gone through, and I get an alarming email from Amazon with a deadline, like this:

We're having trouble completing the payment for the above order. The issuing bank may have declined the charge if the name, expiration date, or ZIP Code you entered at Amazon.com does not exactly match the bank's information.

Valid payment information must be received within 3 days, otherwise your order will be canceled.

Now I've got three days to try to figure this out (by trying random combinations of billing information), or I'll have to decide to just pay from my bank account. That sucks. So what do we do about it?

Most of the gift cards I've been given have listed in their rules that they can't be used to buy other gift cards. From experience, though, that rule does not seem to be very widely enforced, so here's what an Amazon purchase from a prepaid card looks like for me now:

Walk into a brick-and-mortar grocery store (Kroger), buy an Amazon gift card with my prepaid card, then use the Amazon gift card to make my actual purchase. Sometimes I've gotten a weird look from the grocery store cashier when he or she has asked to see my ID and realized the name on the card was "A Gift For You", but it's never prevented the purchase from going through.

For best results, it stands to reason that buying a gift card at the least technologically advanced store would have the highest chance of success, since they probably don't have a system that checks for gift card purchases. To find a suitable store near you, check out Amazon's list of gift card retailers, many of which are gas stations and grocery stores.

Hopefully this helps someone who's struggling with the same problem of being unable to actually use the money locked inside a prepaid card. At the very least, I'd encourage anyone thinking about buying one of these cards to reconsider and maybe just buy a store-specific card.

Cheers, and Happy New Year!