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by mlyle
1986 days ago
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I think you're not understanding me. They have to sell it to retailers for less than they'd get after credit card acceptance. E.g. Apple sells gift cards for $88/$100 to a retailer, who then uses the remaining $12 on transaction costs (including paying their credit card fees) and profit margin. Vs. Apple likely loses ~2% on credit card acceptance-- and gets to keep $98/$100. It's still worth it, because they capture money from last-minute gifts, etc... |
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Though $88/100 is super unrealistic with margins on electronics of 1-2% Amazon would be taking a loss of what the profit from 10 laptop sales every time they dealt with someone buying a laptop all in gift cards.
Or maybe gift cards are so rarely used in this way they write it off with higher margin uses