Pros/Cons of taking Digital Gift Cards as payment for DVC rentals

[pianomanzano]

I've noticed lately in some private DVC rentals on FB that people are offering the option of e-gift cards as payment, sometimes at a discount compared to other forms of payment. I'm slightly intrigued because of the ability to transfer the value directly into my own personal gift card(s), easily pre-pay dues (i.e. not using the rental funds for other reasons), and taking away the ability for a nefarious renter doing a chargeback. But what am I missing or not thinking of as to why it would be a bad idea? To be clear, I wouldn't take physical gift cards, I would want digital gift cards that I can immediately transfer. Any other reasons why this would be a good/bad idea?

 

[Jgc014]

One downside is that I can buy Disney gift cards for a discount (I usually target 10ish%), so if I am giving a discount to the renter for using Disney gift cards, and then I can’t personally buy the discounted gift card, I am taking a double hit on value. For example, if my cash price is $200, but my gift card price is $190, I get $190 total in gift cards. But if I just take cash, buy a $200 Disney gift card for $180 and have $20 cash leftover, I have $220 in value instead of $190.

For payment, I am assuming they would just send you an gift card, they would never personally see the numbers?

I also think most times I have seen this gift card arrangement is with Non-Us renters, so they don’t have to deal with exchange rate and exchange fee issues.

 

[Robbie Cottam]

I've noticed lately in some private DVC rentals on FB that people are offering the option of e-gift cards as payment, sometimes at a discount compared to other forms of payment. I'm slightly intrigued because of the ability to transfer the value directly into my own personal gift card(s), easily pre-pay dues (i.e. not using the rental funds for other reasons), and taking away the ability for a nefarious renter doing a chargeback. But what am I missing or not thinking of as to why it would be a bad idea? To be clear, I wouldn't take physical gift cards, I would want digital gift cards that I can immediately transfer. Any other reasons why this would be a good/bad idea?

You take away the ability for charge backs with a contract, saying the reservation will be canceling if the money is reversed and rent more than 60 days before travel.

Anyone asking me to pay for anything with a gift card seems shady to me, personally…

 

[DaveNan]

Once you receive the GC, I would immediately transfer the funds to a different, empty GC(s) you already have. This way the renter could no longer access the funds. The method also avoids any financial record of the transaction. As has been discussed on this board several times the rental income is subject to taxation. With banks and money transfer services now changing their reporting rules (held off in 2022, but still is supposed to happen in 2023), it would no longer be your choice about how much to report. With GC, it is still up to you alone to report the income.

 

[thank_the_phoenicians88]

If the owner is accepting gift cards, they likely are doing that to avoid a paper trail showing that they took cash for their rental...thus no evidence that they rented out their property and nothing for the IRS when it comes time to pay the tax bill. That would be my guess.

 

[zavandor]

Unfortunately now PayPal changes a commission even to transfer USD funds to a USD bank account, if you are not a resident, on top of the commissions for the payment itself. Which stinks. This would be my reason to accept a payment with Gift Cards, not avoid taxes.

 

[CraigInPA]

Don't be so sure that the trail of money transfer from one card to another card isn't kept, nor that transfer can't be un-done if there is a later claim of fraud.

 

[Brian Noble]

I suppose I can see it for international transactions, but there's a much simpler way to deal with having to convert between currencies often.

https://www.nerdwallet.com/article/banking/multi-currency-account