4 Reasons Why Monthly Fees Trump Transaction Fees

2 min read

If you’re looking for the right gift card solution for your business, you’ll have to consider several options. Deciding whether you’d prefer paying one monthly fee or multiple transaction fees is one of them. Here are four reasons why we think monthly fees are your best bet.

You can budget more easily when you know what to expect.

Gift cards are a great way to increase your cash flow, but the transaction fees associate with your gift card program can take a good chunk out of your bottom line. Every time customers buy a new gift card, use their card or ask you to check their balance, you’ll be charged a fee. And the worst part? You can’t predict how many times that’ll happen. In other words, you might pay more fees on certain months depending on the number of gift cards you sell and the face value of each card.

By choosing a gift card solution with a fixed monthly fee, you can say goodbye to guessing and hello to reliable budgeting, as you’ll know exactly how much you can expect to pay each month.


You won’t pay more if you sell more.

The whole point of a business is to make a profit, so naturally you’ll want your gift card program to be successful. But with transaction fees, the more you make, the more you pay. A 2% or 3% transaction fee might not seem like a lot at first glance, but if you do end up selling a lot of gift cards — before Mother’s Day or Christmas, for instance — that seemingly low rate could easily translate into fees in the double or triple digits.

With a monthly fee, only you benefit from a higher profit. You could set a world record for the most gift cards swiped, yet you’d still pay your provider the same fee month after month.


You won’t have to worry about hidden costs.

If your gift card program fees are billed to you based on a factor as unpredictable as transactions, your profit will vary, and as a result, so will your provider’s. Providers want a sure-fire way to get paid, so if they can’t guarantee a profit through transaction fees, they’ll find ways to make it elsewhere. That’s when you might find out that those low fees are being compensated for through steep gift card prices or hidden service fees, for instance.

Fixed monthly fees translate into a guaranteed minimum profit for your provider, so you probably won’t have to worry about paying higher prices elsewhere to compensate.


You’ll have only one fee to track.

Ever receive a statement from a bank or phone company and wonder what certain charges are for? Business transaction lists can be long and complicated, making errors easy to miss. If you’re being charged per gift card transaction, could you realistically afford to spend time monitoring each one and contacting your provider to explain any discrepancies?

With a monthly gift card program subscription, you have only one fee to think about. You can just set up automatic bank payments once and forget about them for the rest of the year knowing that they won’t change.


In the end, the type of fee payment model you choose is up to you. Just keep in mind that with a simple monthly fee, issuing just one or two gift cards is often enough to make your money back and then some. Talk about easy!


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