Major problems reported w/ Mastercard gift cards

Many users are reporting a new major issue over the past week with Mastercard gift cards. Reports are indicating that when users attempt to use the cards at some stores, the payment terminal is showing a “Not Authorized” error, but the card is being drained anyway. Comments at Doctor of Credit and reddit indicate the issue has happened at a wide range of stores, including Kroger (and affiliates), Winn Dixie, Publix, Harris Teeter, Walmart, Dollar General, Family Dollar and more. This one looks messy and I’ve not yet seen any reports of resolution, so I would recommend laying low with Mastercard gift cards at the moment (and certainly keeping your receipts even when purchases do not go through).

While there have been noted issues in the past with Mastercard gift cards (particularly from Office Max / Office Depot), the issue there has long been fraudulent draining shortly after activation and before the purchaser is able to use the card. This new issue is different: people are reporting that they attempt to use their Mastercard gift card at a store where it is expected to work (specifically for money order purchases at a number of different grocery store chains or for Bluebird / Serve loads, but I’ve seen at least one report of this happening with a regular purchase at a grocery store) and the payment terminal is showing a “not authorized” error but draining the card anyway. As you can imagine, that puts the customer with the gift card between a rock and a hard place, with the gift card issuer saying that the retailer charged the card and to follow up the them and the retailer showing that the transaction was declined.

Many people specifically note the issue happening with Metabank cards, including those purchased at Staples during the recent fee-free promotion and with $500 Mastercard Gift Cards purchased elsewhere. Blackhawk has apparently been telling people to wait 5-7 business days for the funds to be automatically returned and if they are not after that time to then file a dispute with the retailer, but reports I’ve read indicate that each retailer has reported that the transaction shows as “declined” in their system and to contact the issuer (Blackhawk). Some speculation is that the cards are auto-draining to zero when the system goes to authorize payment and that perhaps using them for a transaction of less than the total card value might not cause the same issue (i.e. using a $200 card for a transaction of $199.98 may not drain the card, whereas using a $200 card for a full $200 swipe is draining the card). Note that I haven’t seen enough data points to back that up as fact.

It is possible that this is just some sort of lag in returning the funds to the cards that will happen automatically, but I’ve seen reports of this happening as far back as 10/22 to some folks with no resolution reported yet. I’m hopeful that this one will resolve itself, but if you’re sitting on unused Mastercard gift cards, you may want to avoid the grocery store / Walmart / Dollar General and associated stores with them for now. At least one commenter reported prepaying utility bills with the cards without an issue this week, so my best guess is that the issue is somehow confined to transactions via an in-person point-of-sale machine.

This is also a reminder of the importance of keeping detailed records. I could see someone who is less organized getting cards mixed up and later seeing $0 balances and assuming that these had been used. While receipts haven’t been of much help to folks thus far, I would imagine that having both the physical card and receipt will better position you for an eventual resolution. Here’s hoping it comes sooner rather than later for those affected.

H/T: reddit, Doctor of Credit, and Miles to Memories

About Nick Reyes

Nick Reyes is a (fairly) regular guy with an animalistic passion for maximizing the value of miles and money to travel the world in comfort and style. There is little in life that he loves more than finding a fantastic deal and helping you shop smarter & harder to achieve your travel dreams.

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Jamie
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Jamie

The problem is that there is no receipt when the card is denied. So, I have an empty card and no physical records other than from when I bought it. Hopefully since this is so widespread they will fix it and return the money automatically. But, like you say, it’s been over a week for some people.

Gene
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Gene

exactly. i was using multiple MCGCs & VGCs in one transaction.
VGCs-no problem and shown on receipt.
MCGCs-“not authorized” and no record of any kind on the receipt.

has anyone won a dispute/investigation with blackhawk/giftcardmall in a similar non-fraud situation?
did it take 90 days?
which documents did you provide?
thanks!

losingtrader
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losingtrader

OMG this has got to be scary when you are operating on incredibly thin margins and your credit card bill comes due.

Dick Bupkiss
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Dick Bupkiss

If you are operating like that, you should not be playing this game. Period.

Stuff happens. Things fail. If you’re in this game, eventually something WILL go sideways and leave you in the lurch. That is inevitable. USUALLY you are able to recover you money, EVENTUALLY, but that can take months. Never, ever play this game with money that you can not afford to be without for 6 months or so.

Matt
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Matt

On a maybe unrelated note. Bought a VGC (sunrise) yhe other day and cannot get GCM website to recognize it, just says unable to process. I called the number and was able to verify funds and change the pin, but after 3-4 days still can not get the website to even acknowledge the card, tried multiple different devices and browsers. Hesitant to use it for that exact same reason

Franz
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Franz

Any word if this affects Plastiq payments using MCGC?

YoniPDX
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YoniPDX

Used BHN MCGC from Staples purchase last week on Mortgage and Auto loans thru Plastiq drained without issue. Checked both Plastiq and GCM website after seeing post from last weeks MC sale.

toomanybooks
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toomanybooks

With all these absurd MC debit card problems stretching back YEARS, you’d have to be nuts ever to buy one again.

nsx at FlyerTalk
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nsx at FlyerTalk

It’s almost as if manufactured spending is more trouble than it’s worth.

CaveDweller
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CaveDweller

Yup I agree just from an Old Flipper not the Fish .
CHEERs

craig
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craig

so I had something like this happen a while back but what I ended up doing was taking the rejection receipt from walmart, and what happened was when the card was drained the issurer automatically turns the card off so first you got to turn it back on so returns can happen, and 2nd I had to spend about a week and half moving up walmarts chain of command where they eventually not only found the money but kept saying they try returning it and its not working so to call the issuer which is where I found out the card issuer turned it off once it reaches 0 since that time I always try and leave just .01 on the card to make sure its not turned off or anything.

HoKo
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HoKo

Any updates here? Giant has 2x gas points promo ending on Thu so I’m trying to figure out if it’s safe to buy MCGC’s at this point?

Edward
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Edward

Anyone has any updates on this issue? Grocery store said they didn’t take the money. MC mall said the transaction was settled??? Where is the money?? Anyone has the same problem?