Is this a change to paying dues with gift cards?

[tidefan]

I always pay on my monthly dues each month with the Redemption Card from my Disney Visa. Since I won't be able to do that anymore, we'll probably get rid of that card and get a better one (and there are better ones...)

 

[DanCali]

Gift cards are sold by merchants to stores at a discount, typically around $85-90 for a $100 card. The store then sells it for close to $100 (or, sometimes, with discounts as many here target).

But this means Disney only ends up getting 85-90 cents on the dollar (or however much they sell their cards to retail stores) for this money. If you're turning around and spending it on dues, that's essentially a processing fee of 10-15% for Disney to absorb into maintenance fees somehow.

I am not sure it works this way.

I suspect the Disney "unit" issuing the cards, likely has its own business model. Maybe they do offer them to places like Publix, Target or Costco at various discounts. But I suspect maybe places, like Publix and Walgreens may only get a small (~5%) discount because the gift card rack drives traffic to the store and people also shop for other things while there.

When a gift card is used at DVC, I suspect the amount is paid to DVC in full, just as it is probably paid if full to DCL, Adventures by Disney, Disney Parks, Disney restaurants, Disney stores, or any other place that accepts the Disney gift card (maybe a processing fee is deducted, similar to a credit card). Disney itself or rather, the Disney business unit issuing the card may take a small loss on any card that is used, but the money on gift cards is made on unused/forgotten/partially-used/lost cards... My kids probably still have a bunch of Barnes & Noble and Target gift cards they got on birthdays and holidays and shoved in some drawer to be forever forgotten. Also, the interest is also pretty valuable these days since they can invest the money upfront at 4%-5% per year, and pay it out only when a card is used.

The chart below is for gift cards in general (not Disney-specific), but is pretty illustrative of why companies like to issue gift cards...

 

[eticketplease]

I always pay on my monthly dues each month with the Redemption Card from my Disney Visa. Since I won't be able to do that anymore, we'll probably get rid of that card and get a better one (and there are better ones...)

Either you have a lot of spending or very low dues. There are definitely better cards out there but I wouldn’t get rid of it as it is useful for shopdisney and now you can do Pay Yourself Back you don’t need to transfer the $10 to your card

 

[ehh]

I am not sure it works this way.

I suspect the Disney "unit" issuing the cards, likely has its own business model. Maybe they do offer them to places like Publix, Target or Costco at various discounts. But I suspect maybe places, like Publix and Walgreens may only get a 5% discount because the gift card rack drives traffic to the store and people also shop for other things while there.

When a gift card is used at DVC, I suspect the amount is paid to DVC in full, just it is is probably paid if full to DCL, Adventures by Disney, Disney Parks, Disney restaurants, Disney stores, or any other place that accepts the Disney gift card (maybe a processing fee is deducted, similar to a credit card). Disney itself or rather, the Disney business unit issuing the card may take a small loss on any card that is used, but the money on gift cards is made on unused/forgotten/partially-used/lost cards... The interest is also pretty valuable these days since they can invest the money upfront at 4%-5% per year, and pay it out only when a card is used.

The chart below is for gift cards in general (not Disney-specific), but is pretty illustrative of why companies like to issue gift cards...

View attachment 918974

You’re likely correct about a ‘unit’ structure within Disney, though I wouldn’t have a clue which unit gets charged the losses. The broader point is paying DVC dues is a really inefficient use of Gift Cards for Disney as a whole.

The 85-90 cents on the dollar is fairly typical in the industry. I admittedly kept it simple in my original post but there’s also production, distribution, and integrator costs. There’s also incremental support costs, some fraud losses, and Disney has their own self-serve site to combine/manage gift cards that they maintain (though the site maintenance is probably trivial). Retailers take a cut beyond their own payment processing fees, too.

Where gift cards deliver value for merchants (e.g., Disney) is the redemption delay, which your post highlights well, and incremental sales.

For incremental sales, there’s 4 main flavors:

1. ‘True gifts’ where the recipient wouldn’t have bought the item without receiving the card as a gift.
2. Splurge situations, like getting a larger coffee at Starbucks or a mid-day treat because you have ‘free money’ from a gift card.
3. Discount seekers, where the only way you’ll get them to buy XYZ is if they can get a discount, even if it takes a little work, thus an incremental sale.
4. Customers who prefer the payment privacy or control of gift cards vs credit cards (doesn’t apply to some businesses)

For a DVC member who is buying GCs monthly-ish and redeeming them ahead of the auto payment, Disney gets essentially none of the benefit of the gift card business and all of the downsides.

There’s minimal activation/redemption delay for this payment pattern and how many ‘incremental dues payments’ are there due to gift cards being a payment option? DVC members are going to pay their dues no matter what. And for the edge case where gift cards really are a dealbreaker, that owner will sell (or worse) and be replaced by one where it’s not an issue.

Overall point: the gift card business has significant overhead compared to credit card or ACH payments. There are significant benefits to it for merchants (which is why they all do it), but those benefits don’t really apply for DVC dues payments made monthly.

Some analysis was probably done in Disney about gift card usage and monthly-just-before-autopay DVC dues payments was probably among the least efficient (for Disney) uses across the entire company. I wouldn’t be surprised if paying DVC dues with GCs is generally inefficient for Disney, too.

 

[Maistre Gracey]

Perhaps I’m reading this wrong, but it seems some here are PO’d at Disney because they can no longer get an interest free discount..?

 

[tidefan]

Either you have a lot of spending or very low dues. There are definitely better cards out there but I wouldn’t get rid of it as it is useful for shopdisney and now you can do Pay Yourself Back you don’t need to transfer the $10 to your card

Not really, I'd have $30-$60 in Redemption dollars each month that I could put towards dues. I suppose I can just collect them all during the year and pay them at once next January (when I have a fair amount stored up again), but I did appreciate the fact that it would knock my monthly draw down a bit...

 

[eticketplease]

Not really, I'd have $30-$60 in Redemption dollars each month that I could put towards dues. I suppose I can just collect them all during the year and pay them at once next January (when I have a fair amount stored up again), but I did appreciate the fact that it would knock my monthly draw down a bit...

Assuming that you have the AF Card that earns 1% back that means you are spending $3-6K a month. IMO that is lot of spend on a 1% card I would definitely look at other cards.

However yes you could save up the rewards dollars and then once you have enough you could pay off your contract with the Disney Visa.
When you do that you would earn the 1% back and then you could utilize the "Pay Yourself Back" feature to wipe that charge off the credit card. Much better than transfering to a rewards card as you are able to earn a little extra back.

 

[Lorana]

Assuming that you have the AF Card that earns 1% back that means you are spending $3-6K a month. IMO that is lot of spend on a 1% card I would definitely look at other cards.

However yes you could save up the rewards dollars and then once you have enough you could pay off your contract with the Disney Visa.
When you do that you would earn the 1% back and then you could utilize the "Pay Yourself Back" feature to wipe that charge off the credit card. Much better than transfering to a rewards card as you are able to earn a little extra back.

If they are earning that much each month, I'm hoping/presuming that they at least have the Premier card so they are earning 2% back in relevant categories.

 

[jennypenny]

Yes, some of us use the premier card exactly that way (putting it towards dues each month). If you charge business travel and/or expenses to the card, it can cover dues easily.

This is a bummer. I'll let the rewards dollars ride for next year, but I wasn't planning on paying my dues off in January. I'll def buy gift cards for that -- 5% off GCs is a decent discount.

 

[sethschroeder]

Perhaps I’m reading this wrong, but it seems some here are PO’d at Disney because they can no longer get an interest free discount..?

Way out of context on your part.

The issue stems from:
1) monthly payments still exist
2) paying with gift cards still exists
3) no actual reason as to why this is removed
4) MS is hired by me (and all of the membership) to serve our best interest in using our deeded right to rooms at the DVC resorts

That is where my issue comes from.

No different than any negative policy change to the consumer. There better be a dang good reason.

You can think it's not an issue but I think a number of people see my posts as hopefully very consistent of DVC Member Services needing to follow the policy and enact what is positive change not change for the sake of profit motives.

 

[Sandisw]

Way out of context on your part.

The issue stems from:
1) monthly payments still exist
2) paying with gift cards still exists
3) no actual reason as to why this is removed
4) MS is hired by me (and all of the membership) to serve our best interest in using our deeded right to rooms at the DVC resorts

That is where my issue comes from.

No different than any negative policy change to the consumer. There better be a dang good reason.

You can think it's not an issue but I think a number of people see my posts as hopefully very consistent of DVC Member Services needing to follow the policy and enact what is positive change not change for the sake of profit motives.

Just to clarify, the actual policy says that monthly payments need to be paid via a bank account.

So, it appears they have decided to actually follow it for all forms of payment.

No clue why they change…but they never allowed partial payments with credit cards once the monthly plan started so looks like they are just extending the rules to the other options.

Maybe they got complaints from people that thought they should be able to use CC as well?

Who knows? But the paying off the monthly payment with a gift card was a loophole against the T and C So I guess DVC hdecided to close it.

 

[Sandisw]

A few questions answered today at the VGF meeting. The accounting system has been updated and it sounds like the logistics of how things happen was behind the change to enforce the intent of the monthly payment plan…which was withdrawals from accounts, and something to the effect that partial payments which paid ahead of time but not in full messed with something….

Once on the plan, any future payments one would want to make would have to pay the contract in full.

If one cancels the plan, you will be required to pay the full balance or penalties would happen.

So, after the January/Feb date, any use of gift cards would need to be enough to pay the balance for the contract.

It didn’t sound the ability to pay a balance in full with a CC would change when enrolled in autopay.

 

[eticketplease]

A few questions answered today at the VGF meeting. The accounting system has been updated and it sounds like the logistics of how things happen was behind the change to enforce the intent of the monthly payment plan…which was withdrawals from accounts, and something to the effect that partial payments which paid ahead of time but not in full messed with something….

Once on the plan, any future payments one would want to make would have to pay the contract in full.

If one cancels the plan, you will be required to pay the full balance or penalties would happen.

So, after the January/Feb date, any use of gift cards would need to be enough to pay the balance for the contract.

It didn’t sound the ability to pay a balance in full with a CC would change when enrolled in autopay.

Thanks for the update.

Was it brought up that you can't pay the dues in full if owning more than $1,000 with a gift card?
Will member services be able to take multiple gift cards at that time so that interest/late charges are not posted?

 

[Sandisw]

Thanks for the update.

Was it brought up that you can't pay the dues in full if owning more than $1,000 with a gift card?
Will member services be able to take multiple gift cards at that time so that interest/late charges are not posted?

Not exactly….but the answer seemed to imply that if you cancel and don’t pay in full, then yes. However, not sure one can pay with MS….

But, I’ll see if I can get more clarity at the SSR meeting….they weren’t even sure about the fees and the start/stop….but got the answer by end of meeting.

If I had to guess, which could be wrong…I would not assume gift cards can be used to pay in full unless the card can cover the balance, once we pass the January date to sign up for monthly.

 

[eticketplease]

Not exactly….but the answer seemed to imply that if you cancel and don’t pay in full, then yes. However, not sure one can pay with MS….

But, I’ll see if I can get more clarity at the SSR meeting….they weren’t even sure about the fees and the start/stop….but got the answer by end of meeting.

If I had to guess, which could be wrong…I would not assume gift cards can be used to pay in full unless the card can cover the balance, once we pass the January date to sign up for monthly.

Thanks Hopefully we can get something more from the SSR meeting but probably not.

Sorry when I said MS I was meaning the Accounting Department

 

[Sandisw]

Thanks Hopefully we can get something more from the SSR meeting but probably not.

Sorry when I said MS I was meaning the Accounting Department

It didn’t come up at the SSR meeting and when I asked privately at the end the info was prettty much the same.

The intent of allowing owners to pay monthly was given as a courtesy in exchange for payments from bank account.

But, the system wasn’t ever supposed to allow partial payments by other means once monthly started. So, that has been fixed.

 

[808blessing]

Are we able to pay one contract in full and keep another on monthly?

 

[Sandisw]

Are we able to pay one contract in full and keep another on monthly?

That should not change. It’s partial payments will no longer be accepted once monthly plan kicks in after January deadline for enrolling in monthly plan.

That’s why they give directions on how to make partial payments in January by turning off and then back on.

After January, the only option will be pay in full remaining or deductions from a bank account.

 

[Cyberc1978]

That should not change. It’s partial payments will no longer be accepted once monthly plan kicks in after January deadline for enrolling in monthly plan.

That’s why they give directions on how to make partial payments in January by turning off and then back on.

After January, the only option will be pay in full remaining or deductions from a bank account.

Thanks for the updates.

Did you get any clarity about if we get hit by late fees if we opt out of autopay after February 15th, and pay off the balance with a GC.

I assume we get the late fees is we opt out and don’t pay off the balance, but how long do we have before the late fees are imposed after opting out.

 

[Sandisw]

Thanks for the updates.

Did you get any clarity about if we get hit by late fees if we opt out of autopay after February 15th, and pay off the balance with a GC.

I assume we get the late fees is we opt out and don’t pay off the balance, but how long do we have before the late fees are imposed after opting out.

I asked about that and the answer was that late fees would apply if not paid in full.

However, the way the system sounds like it will be set up is that no partial payments beyond January.

So, I don’t think it will allow a gift card that doesn’t pay in full to be accepted…which is how it works now for CC. It won’t process.

Whether a call to MA would work? Don’t know. But they confirmed that if autopay is canceled then fees will apply if not paid in full…so that is why I don’t think it will even accept multiple gift cards.

I always pay my balance in full with a CC and it doesn’t require me to even cancel the monthly option when I do.

Honestly, they had to even ask about this.