This is another post in our Manufactured Monday series. We try to offer some insights into manufactured spend each Monday. You can view all posts in this series by clicking here.
The Rumor
MilesToMemories recently posted an ominous suggestion that Walmart may stop allowing gift cards to be used in place of PIN-based debit cards for things like loading prepaid cards and buying money orders. Not only that, but it’s actually going to be hardcoded in the register not to allow these cards, so even a nice (or clueless) cashier won’t be of  any help.
It is certainly feasible for Walmart to code such a thing, since the first digits on a credit/debit card say a lot about the nature of the card, such as which bank issued the card, if it’s credit or debit, and – often – if it’s a prepaid debit card or an ordinary debit card. (See this post from MillionMileSecrets for more details on this.) If Walmart would code such a thing, it would open up a whole new front of trying to find gift cards that aren’t coded as gift cards, and trying to see which prepaid cards (like Buxx, Paypal, etc.) are able to be used at Walmart and which aren’t. I’m putting my money on FreequentFlyerBook for figuring it all out for us.
MilesToMemories found this in a tweet from Ben Turnbull who mentioned a memo stating such a thing. From what I gather, he didn’t actually see the memo, rather he heard about it from a Walmart cashier. The cashier referenced specifically loading prepaid cards, but presumably they would code money orders and the like to not be allowed with gift cards as well.
An interesting question brought up by MilesToMemories is whether the Walmart Money Center ATM will also be coded to reject prepaids, since apparently Walmart is slower at updating their Money Center ATMs than they are at their registers. A glimmer of hope. Wouldn’t help for me since I’ve literally never gotten the ATM to work for me.
My Trusty Cashier
I actually first heard about this new limitation long before this tweet, but in much vaguer terms. Two Money Center reps in my local Walmart, mentioned to me about a month ago that as of April 1, only permanent debit cards will be allowed.
Note that both the rumor I’m starting and the rumor that Ben started specifically mention that this new saga will start on the first of the month. Sounds like we’re on a similar page. My cashiers clearly mentioned April 1, while his cashier mentioned next month, which sounds like March 1. Let’s take the liberty of suggesting that “next month” mentioned by his cashier actually refers to April 1. This would give us an extra month to bring Walmart to court for infringing on our unalienable right for the pursuit of happiness.
When I first heard about the future limitation, I had no way of knowing if this was a decision of my local Walmart store or if it was a corporate decision. I asked my favorite cashier and she didn’t know if it was corporate or local. Even if it was a corporate decision, I didn’t know whether it would be hardcoded in the register or it would be up to the cashiers to enforce.
About a week later, I was purchasing money orders with my favorite cashier again and I broached the topic of  the new limitation coming on April 1. She told me, “Oh, I heard that originally, but now I hear that it’s not happening, so I’m not saying anything anymore”.
This was the last I heard, about a month ago. Just tonight, I got my favorite cashier again on a money order run, and I asked her if there’s any update on the April 1 limitation. She said, “Oh, I haven’t heard about it again. Must have just been a fib.”
My Thoughts
Note that while this cashier is a senior money center cashier, she’s not a manager or an assistant manager, so it’s possible that she simply doesn’t know. But being that she had heard about it originally and then heard that it was retracted, I’m optimistic that it had been considered by Walmart corporate and then been the idea was scrapped.
It is possible that this whole thing was just a back-and-forth that was going on in the management of my local Walmart, but I’m more inclined to put the two stories together and believe that there was a debate at the corporate level about it and they hopefully ended up scrapping the idea.
Of course, even if I’m right, that doesn’t put us in the clear for good, it just puts us in the clear for now. It’s quite possible that they just took away the April 1 date and decided to put some more thought or research into the issue before deciding.
Remember, as much as loading prepaids takes up employee time, it also brings customers into the store. FrequentMiler went as far as saying that Target may decide to consciously allow credit card loads on REDbird so as to draw customers into the store. While I agree that it’s plausible that this is the reason Target hasn’t stopped it yet, I’m skeptical that they won’t stop it eventually. In my view, that and other factors put the issue on the back-burner for them and they’re letting it slide for now, allowing the card to gain publicity.
But in the case of Walmart, the issue is the more minor cost of processing debit cards. While temporary debit cards may cost more than permanent debit cards [since it may not have the 21¢ swipe-fee limit enacted under the Durbin Amendment in 2010], the fees are still quite low. In fact, I’d guess they’re more worried about employee time (and maybe money laundering) than they are about the swipe fees.
Bottom Line
I obviously don’t know anything for sure, but Ben sought out others to ask their local Walmart cashiers about this, so this is my two cents. At the very least, I’m hopeful that we have until April 1, but moreover I’m optimistic that there hasn’t yet been any such decision to stop allowing gift cards and that we’re in the clear for the near future.
If anyone has any reports that they heard from any Walmart employees, please let us know in the comments, so that we can crowdsource this issue into clarity.
