Prezzy Cards – The Christmas Grinch Of Gifts15 December by
Prezzy Cards – The Christmas Grinch Of Gifts
(This article is a bit tongue in cheek, wink wink nudge nudge, but the core premise holds true).
Did you draw the office bully in your Secret Santa? Wondering what to get your mean old Aunt who only fed you broad bean soup as a child? Or maybe you’re still annoyed at your sister from when she ‘borrowed’ your favourite jacket and then lost it.
Great news, we have the perfect anti-gift; Prezzy Cards.
Move over coal as the naughty gift, at least we can draw with you. You might be surprised what is actually left to draw on from a $30 Prezzy Card though.
Ah yes, they seem harmless enough, all nice and shiny on the outside – what a lovely gift – the gift of choice! But alas, choice can quickly turn to frustration, and frustration to emptiness, as you realise all value, and hope, is lost.
Right from the start they get ya, with a $5.951 card purchase fee when you buy online. Ok, fair enough to charge something, the piece of plastic after all must cost at least 30 cents to make. Then there’s a $7.501 postage and handling fee, which takes us to a total of $13.45 in fees – that’s now 45% of the original price paid in fees.
Let’s instead buy one in person at a Post Shop, assuming you can find one2, because then we won’t have the postage and handling fee.
Alright, so your gifting budget was a very decent $30, less the $5.95 card fee of course, so now your gift card has a balance of $24.05. Oh wait, you paid for it with your credit card and they charged you 2.6%1 for that convenience (on both the gift amount and the fees), so to not go over your $30 budget the balance is $23.29 (quick maths3).
Ah but the GrinchBank is not done yet. They’ve only captured some of their festive fees, there is much more fee-fi-fo-fun to be had.
Aunt Agnes is impressed with your gift, she’s been eying up a lovely pair of black shoes with curled up toes that’ll go perfectly with her green and black striped socks. She jumps on to witchesbritches.com and goes to buy them.
But first she phones Prezzy Card to check the balance. She calls the automated assistance line and a robotic voice tells her the balance is now $22.79; after the 50 cents that was just deducted for the privilege of the automated phone call1. That’s a bit poor! But alas, she can still buy the shoes which are very cheap at $15USD.
The card declines. That’s odd, it should only be $21.16NZD4. She calls the phone line again, this time she asks to speak to a real person. This person informs her that overseas websites incur a currency conversion fee of 3.5%1, which for the shoes will be $0.74. She asks if she can top up her card by the 89 cents she is short and the Prezzy Card phone help informs her that actually this call has taken another 50 cents and a further $1.50 off her card to speak with a real person1, so she is now $2.89 short. Flustered, Aunt Agnes asks to dispute the transaction of $2. She is told if her dispute is raised and not accepted, she will be then charged $151. Aunt Agnes quickly hangs up not wanting to lose any more credit.
Shop online they say, just as good as a credit card! Better than cash! Except credit card balances don’t expire, and neither does cash. But Prezzy Cards do.
She puts the card in a drawer and forgets about it. A couple of years later she finds it again, and with the previous traumatic experience now a distant memory, she attempts to use the credit with her next supermarket shop. But Prezzy Card have a final trick – an expiry date! The card declines, Aunt Agnes goes red, that’s a bit embarrassing. And sure enough, the money is all gone, poof.
There are many reasons Prezzy Cards are promoted; shop online they say, just as good as a credit card! Better than cash! Except credit card balances don’t expire, and neither does cash. Even many gift vouchers these days are ditching expiry dates. But Prezzy Cards expire. There have been numerous complaints5 about Prezzy Cards over the years, and after much pressure from Consumer NZ they did extend the expiry from 12 months to 246, though still we believe this to be inadequate. Reading the many grievances in comments on the article cited above shows just some of the many terrible experiences people have had with these cards.
New Zealand Post, who owns KiwiBank, who used to own Prezzy Card, refused to respond to an official information request asking just how much credit expires without being used, citing commercial sensitivity. We think it’s fair to assume that the revenue they’ve enjoyed from unredeemed money would be significant. In fact, it led to the sale of Prezzy Card to epay in 2019, with a cool $12 million noted as income from the sale7. Not bad for a business that shouldn’t have much else on the balance sheet than a brand, a ledger and a few pieces of plastic.
At Lifetime, we’re passionate about making smarter financial decisions, so this year, we suggest you avoid these fee drunk glorified gift vouchers. Instead, here’s a quick rundown on our top gift ideas for 2020 that might better suit.
1 It's a right old fee spree. https://www.prezzycard.co.nz/media/wysiwyg/prezzy/prezzy_card_retail_fees_Nov20_1.pdf
2 Because all the standalone Post Shops seem to have closed. https://www.stuff.co.nz/dominion-post/news/108893320/nz-post-to-close-79-standalone-post-shops-as-part-of-costcutting-move
3 That was some tricky maths, worked out as:
4 Using a currency conversion rate of 1 USD = 1.41190 NZD as at 15 December 2020 (xe.com)
5 The comments make for some sad reading. https://www.stuff.co.nz/business/101814082/prezzy-card-generating-complaints-consumer
7 Not a shabby sale price. https://media.kiwibank.co.nz/media/documents/Disclosure_statement_-_December_2019.pdf
And with thanks to MoneyHub on their ongoing holding to account of Prezzy Card. https://www.moneyhub.co.nz/prezzy-card-review.html
Disclaimer: This article has been prepared for the purpose of providing general information, without taking into consideration any particular objectives, financial situation or needs. Any opinions contained in it are held by the author as at the report date and are subject to change without notice.
Market & Portfolio Update - April 2022
Global share markets continued their choppy start to 2022 during April.For New Zealand based investors, a fall in the NZ dollar played an important role in helping offset the volatility global share markets experienced. The NZ dollar fell against most major currencies supporting the returns of unhedged overseas assets (assets that are free to move with exchange rates). As a result, ‘unhedged’ overseas investments fell by only 1.8% for NZ based investors.
The KiwiSaver Gender Divide – Why are women saving less and what can be done to combat this?
Recent data shows that, on average, women have 20% less in their KiwiSavers than men. The gap being at its largest between men and women in their 40s and 50s. There are a few factors that come into play causing this divide and although it will take years to achieve equality, there are ways in which we can be proactive to help close the gap. As of August 2021, the gender pay gap is at 9.1% in New Zealand, a decrease of about 0.4% from 2020’s stats.