Payment Processing · Buyer guide
A gift card is money a customer hands you before they buy anything. That is the appeal: the cash arrives in November, the sale happens in February, and some of it is never spent at all. It is also why a gift card program has two kinds of cost that most merchants only see one of. The first is what your point-of-sale provider charges to sell, load and redeem the cards. The second is what the law stops you from doing once the card is in the customer's pocket.
We read the published gift card pricing of six point-of-sale systems the site has reviewed, and the federal and state rules that apply to any business selling its own cards. Prices are as published on 1 October 2026.
When a customer pays for a gift card with a credit or debit card, that payment is processed like any other sale and costs your normal processing rate. The question is what the gift card system adds.
Square is the clearest. Its gift card page says you "pay the standard processing fee when a customer buys a gift card" and "up to a 2.5% load fee each time funds are added to a gift card or eGift card". Its help centre says the 2.5% applies "whenever you load or reload a physical gift card or digital eGift card online or in store", and that there are "no additional fees to redeem Square Gift Cards". The load fee is charged on the Free and Plus plans. On Square Premium, which costs $149 a month per location, it is 0%. Square does not charge the load fee when you refund a sale onto a gift card.
SpotOn charges nothing a month for gift cards and "a 2.5% load fee on e-gift cards purchased by customers". Its page does not list a load fee on physical cards, which you pay for when you order them: 75 cards cost $85.50 plus shipping, and 500 cost $450.
Take a café on Square's free plan that sells $20,000 of gift cards in a year, all paid by card in person, at an average of $50 each. That is 400 sales. At Square's in-person rate of 2.6% + 15¢, processing costs $580. The load fee adds $500. The program costs $1,080 before a single card is redeemed, or 5.4% of what was sold, and about 46% of that is the load fee.
Upgrading to Premium removes the load fee, but Premium costs $1,788 a year per location. The load fee alone only justifies it if you sell about $71,500 of gift cards a year at one location. Premium also lowers your card rate on every other sale, which is the real reason to consider it, and our analysis of when a pricier POS plan pays for itself works that maths through.
When a customer spends a gift card, no card network is involved, so there is no interchange and usually no processing fee. Square, SpotOn and Clover's own pages describe redemption as free or list no redemption fee.
Shopify is the exception, and only for newer stores. Its help centre says: "For Shopify stores created on or after May 12, 2025, orders that include gift cards as a payment method are charged third-party transaction fees on the order amount paid for using a gift card." The fee is waived only on Shopify Plus with Shopify Payments active. Shopify's pricing page lists third-party transaction fees of 2% on Basic, 1% on Grow, 0.6% on Advanced and 0.2% on Plus. On those rates, a $100 order paid entirely by gift card on a new Basic store would cost $2, on a sale whose card processing you already paid for when the gift card was bought. Shopify adds no fee of its own when a gift card is loaded: "Shopify doesn't charge you when you load up your gift cards." Gift cards are included on every Shopify plan.
Stripe does not issue gift cards. Its gift card support for in-person payments is in private preview, works with one outside provider, SVS (Stored Value Solutions), and the documentation says closed-loop gift cards "settle off Stripe". If you run your shop on Stripe, the gift card program is a separate contract with a separate fee table.
A card you sell for use only at your business, or at a group of affiliated businesses, is a "store gift card" under the federal Regulation E, 12 CFR 1005.20. Its rules are written to bind any person who sells or issues such a card, so they apply to a single shop as much as to a national chain. The CFPB's official commentary says franchisees can count as an affiliated group. The three rules that matter:
Some cards are outside these rules, including a "loyalty, award, or promotional gift card", a card not marketed to the general public, and one issued in paper form only. A promotional card is not a free pass, though: it is excluded only if the card says on its front that it is promotional and shows the expiry date there, and carries its fees and a toll-free number for fee information. Under the federal rule, the bonus card you hand out with a $50 purchase can expire much sooner than five years, but only if it says so on the card. Some states treat promotional cards differently again.
Federal law is the floor. Several states ban expiry dates and fees outright and make you pay out a small leftover balance in cash on request:
This is not a full list. Other states set their own thresholds and exceptions, so check your state's statute before printing any terms on a card. Square and Clover both say their cards do not expire, which keeps you clear of every expiry rule; the cash-back rule is something your staff have to apply at the counter.
Unspent gift card balances, known as breakage, can be large. Starbucks reported $200.4 million of breakage revenue from its company-operated stores in its 2025 fiscal year. Whether a small business may keep its breakage depends on its state's unclaimed property law. California's unclaimed property statute does not apply to gift certificates that comply with its gift certificate law, but does apply to one that has an expiration date. Washington excludes a gift certificate that complies with its gift certificate chapter. Other states treat unredeemed balances as property to be reported. Ask your accountant how your state handles them before you count breakage as income.
