Due to vendors' transactional fees, the purchase price of tokens made by you as admin is not equivalent to the purchase price of gift cards made by your users.
This article will explain what Transaction Fees are, how they’re being paid, and by who. But first, let’s better understand the terms being used in this article:
Tokens
Your company’s digital coins. These can be gifted to your employees (users).
10 tokens equal 1 USD, so the purchase price by the company for 1,000 tokens is $100, for 5,000 tokens it’s $500, and so on.
Vendors
These are our partners, who provide gift cards that users can purchase.
Transactional Fees
Vendors charge Transactional Fees for their gift cards when being purchased by users. These fees are not being paid directly by your company nor by your employees, but rather require employees to use more tokens when making a gift card purchase.
The Transactional Fees in the US are 10% for any purchased gift card. For all other countries, the fees are 15%, as they include an exchange rate fee.
For example, if a US-based company purchased 10,000 tokens for the price of 1,000 USD, their users will be only able to purchase gift cards for the sum of ~910 USD with 10,000 tokens. This is due to the 10% transactional fee taken by the vendor.
Please note that when purchasing tokens you are always notified that the price of purchasing tokens and the prices of the gift cards may differ.
Who “pays” the fees and how?
Fees are being “paid” by the users in the form of a token’s worth when purchasing the gift cards, which are being reduced due to the fees.
For an employee, a $10 gift card will cost 110 tokens in the US, and 115 tokens outside the US. Although the company purchased 100 tokens for $10, the employee will need to use 110 or 115 tokens in order to exchange them for a $10 gift card.
Below you can see how this looks when the user uses the token, vs when the admin purchases them.
Want to learn more about the Rewards feature? Check out this article.
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