Prezzy® Card Review: Fees & Shortfalls
Giving someone a Prezzy® card? Make sure you know about the EIGHT fees.
Updated 14 February 2020
Prezzy® cards have become a popular, flexible option for giving a gift that can be spent anywhere with EFTPOS, without the impersonal undertaking of stuffing cash into an envelope.
Their popularity is also due to the flexibility they offer – rather than fixing a gift to a particular retailer like a gift voucher would, a Prezzy® card lets the owner shop as if they were using an EFTPOS card. The person making the gift chooses how much they want to gift, and the card is “topped up” with that amount. Once done, it's good to go.
Sounds fairly good, right?
Well, despite the flexibility of benefits versus traditional gift vouchers, our analysis highlights a lot of fees being charged in the life of a Prezzy® card, as well as the risk of losing everything if it's unused.
Let’s go through the fees, step by step.
Their popularity is also due to the flexibility they offer – rather than fixing a gift to a particular retailer like a gift voucher would, a Prezzy® card lets the owner shop as if they were using an EFTPOS card. The person making the gift chooses how much they want to gift, and the card is “topped up” with that amount. Once done, it's good to go.
Sounds fairly good, right?
Well, despite the flexibility of benefits versus traditional gift vouchers, our analysis highlights a lot of fees being charged in the life of a Prezzy® card, as well as the risk of losing everything if it's unused.
Let’s go through the fees, step by step.
Prezzy® Card Fees
Fee 1 – “Card purchase fee” - $5.50 per card when bought online at prezzycard.co.nz
Simply buying the card incurs a $5.50 charge, regardless of the value you want to put on it. So if you want to give $25, you are paying $30.50 ($25 + $5.50) for the Prezzy® card.
Fee 2 – “Postage and handling fee” - $2.50 per card
Having purchased your card online, you are now charged $2.50 delivery fee. This can be avoided if you purchase a Prezzy® card from a participating store or at a PostShop, but the cost of the card (“Fee 1”) increases to $5.95 (from $5.50).
Fee 3 – “Credit card convenience fee” – 1.59% of value added + all fees
If you want to purchase your Prezzy® card with a credit card, you will have to pay an additional 1.59% of the value you add to the card, as well as 1.59% of all fees (i.e. “Fee 1” and “Fee 2” above). We personally think being charged a credit card fee on the fees is outrageous.
But wait, there’s more. Want to know the balance of your Prezzy® card, replace a damaged card or dispute a transaction? There are fees for that...
Fee 4 – “Customer service fee” - $0.50 per call to the automated phone service, plus $1.50 per call if you choose to speak to a Customer Service Representative
If you want to know the balance of your card, or have any other questions about using it, you’ll be deducted 50 cents for an automated phone banking styled assistance, or $2 to talk to someone (which includes the $0.50 fee for the phone banking service). This will be deducted from your Prezzy® card’s balance.
Fee 5 – Card replacement fee - $10 to any New Zealand address (and $50 to an overseas address)
Lost your Prezzy® card? Replacements are charged at $10 for a local address, $50 for an overseas address. This service is only available if you have previously registered your card (free of charge), if you misplace the card and it hasn't been registered then you will lose the value of your card.
Fee 6 – “Disputed transaction fee” - $15 per transaction
If you dispute any transaction on your Prezzy® card but cannot prove you didn’t use it, then you will be charged $15.
Fee 7 – “International transaction fee” – 3.5% of transaction value
If you use your card on an overseas website, Prezzy® card will charge you 3.5% for the conversion of the currency you bought into NZD. For example, if you buy something for US$100 then you will be charged US$3.50, translation to NZD (around $5). We take issue with this fee in particular, given it is close to TWICE what Kiwbank (the owner of Prezzy® card) charges for a normal credit card (“1.85% of the New Zealand dollar amount once converted” per the Kiwibank credit card fees schedule.
Fee 8 – “Expired value”
While not specified as a fee, Prezzy® cards are issued with a maximum use of 24 months, and each card has an expiry date printed on the front of the card. Once that date has passed, any amount remaining on the card will be deleted and the card will have a $0 balance.
On 27 February 2018, MoneyHub released its report to the media which led to national exposure. Two days later, Prezzy Card increased the expiry date of credit from 12 months to 24 months for cards issued on/after 1 March 2018. MoneyHub continues to campaign for the elimination of any expiry date on gift cards.
Fee overload? Very understandable!
Simply buying the card incurs a $5.50 charge, regardless of the value you want to put on it. So if you want to give $25, you are paying $30.50 ($25 + $5.50) for the Prezzy® card.
Fee 2 – “Postage and handling fee” - $2.50 per card
Having purchased your card online, you are now charged $2.50 delivery fee. This can be avoided if you purchase a Prezzy® card from a participating store or at a PostShop, but the cost of the card (“Fee 1”) increases to $5.95 (from $5.50).
Fee 3 – “Credit card convenience fee” – 1.59% of value added + all fees
If you want to purchase your Prezzy® card with a credit card, you will have to pay an additional 1.59% of the value you add to the card, as well as 1.59% of all fees (i.e. “Fee 1” and “Fee 2” above). We personally think being charged a credit card fee on the fees is outrageous.
But wait, there’s more. Want to know the balance of your Prezzy® card, replace a damaged card or dispute a transaction? There are fees for that...
Fee 4 – “Customer service fee” - $0.50 per call to the automated phone service, plus $1.50 per call if you choose to speak to a Customer Service Representative
If you want to know the balance of your card, or have any other questions about using it, you’ll be deducted 50 cents for an automated phone banking styled assistance, or $2 to talk to someone (which includes the $0.50 fee for the phone banking service). This will be deducted from your Prezzy® card’s balance.
Fee 5 – Card replacement fee - $10 to any New Zealand address (and $50 to an overseas address)
Lost your Prezzy® card? Replacements are charged at $10 for a local address, $50 for an overseas address. This service is only available if you have previously registered your card (free of charge), if you misplace the card and it hasn't been registered then you will lose the value of your card.
Fee 6 – “Disputed transaction fee” - $15 per transaction
If you dispute any transaction on your Prezzy® card but cannot prove you didn’t use it, then you will be charged $15.
Fee 7 – “International transaction fee” – 3.5% of transaction value
If you use your card on an overseas website, Prezzy® card will charge you 3.5% for the conversion of the currency you bought into NZD. For example, if you buy something for US$100 then you will be charged US$3.50, translation to NZD (around $5). We take issue with this fee in particular, given it is close to TWICE what Kiwbank (the owner of Prezzy® card) charges for a normal credit card (“1.85% of the New Zealand dollar amount once converted” per the Kiwibank credit card fees schedule.
Fee 8 – “Expired value”
While not specified as a fee, Prezzy® cards are issued with a maximum use of 24 months, and each card has an expiry date printed on the front of the card. Once that date has passed, any amount remaining on the card will be deleted and the card will have a $0 balance.
On 27 February 2018, MoneyHub released its report to the media which led to national exposure. Two days later, Prezzy Card increased the expiry date of credit from 12 months to 24 months for cards issued on/after 1 March 2018. MoneyHub continues to campaign for the elimination of any expiry date on gift cards.
Fee overload? Very understandable!
To see how the fees are incurred, let’s walk through an example:
Example 1: Claire wants to gift her friend Annabel a $50 Prezzy® card for her birthday.
Let’s look at the fees:
Fees for the gift giver (Claire)
Fees for the gift receiver (Annabel)
Example 1: Claire wants to gift her friend Annabel a $50 Prezzy® card for her birthday.
Let’s look at the fees:
Fees for the gift giver (Claire)
- Claire buys a Prezzy® card online, paying $5.50 for the card plus $2.50 for delivery.
- She pays by credit card, so her total order of $58 ($50 gift + $5.50 card fee + $2.50 delivery fee) is charged 1.59% and becomes $58.92.
- In total, that works out to be around 18% of fees.
Fees for the gift receiver (Annabel)
- Annabel uses the card and buys a book for $20, and has a $30 balance remaining.
- Annabel forgets where she put the card after some time and needs to call up for a replacement. The balance of $30 is reduced to $18 as she is charged $2 for the call and $10 for the replacement card.
- Annabel then uses the card well after the 24 month period and finds out it has expired. The remaining $18 has been forfeited.
- To recap, from the $58.92 Claire spent, Annabel received the value of a $20 purchase.
Should I buy a Prezzy® card?
- We believe the right answer is no.
- The eight different types of fees limit the amount of value your recipient gets, and there are a few nasty surprises lurking if your recipient isn't careful.
- A gift shouldn't be an obligation to stay ahead of the curve, and we believe anyone receiving a Prezzy® card needs to be fully briefed and familiar with all the fees and expiry risk. This isn't clear to the typical user.
- When our credit card or EFTPOS card expires we get sent a new one, but with Prezzy® card the card expires in only 24 months and the money is never seen again.
- You may not like giving cash as a present, but cash is flexible, has no fees and the amount you give guarantees the recipient will be able to buy something.
- Unlike a Prezzy® card, cash does not expire, so your gift won’t be worthless unless of course it's lost.
- Your recipient also knows how much cash they have left from your gift, a Prezzy® card requires a balance check.
Essential Tips – The best way to “use” a Prezzy® card without losing out:
If you have a Prezzy® card sitting around, USE IT NOW. Here are our top tips:
- Check the expiry date, if it’s valid then use it as a part-payment towards an item you need.
- If you have already used some of the Prezzy® card value, verify the remaining balance quickly, and use it on your regular shopping without being sentimental. We recommend a supermarket, where you can pick multiple methods of payments.
- Don’t use it overseas - if the payment is rejected later on by the merchant (as a Prezzy® card is a hybrid credit card and can fail security requirements) you have even less time to use it.
- Don’t throw it out until the value is down to zero and you have received ALL your purchases, after which time you are then best to bin it.
- Don't be tempted to top it up and give it to someone else as a gift, as doing so would only serve to continue the Prezzy® card cycle of abuse.
- Take note of other people's experiences. MoneyHub's recent feature in a Stuff article about Prezzy Card gained a lot of comments, including an instance of double payments, insufficient funds, disputes, fees, phone calls.
