Amazon Will Now Pay You to Use Gift Cards — but Is It a Good Deal?

Woman holding credit card, looking at computer
Photo by pathdoc / Shutterstock.com

Amazon recently launched a new program for Amazon Prime members called Amazon Reload. It offers 2 percent rewards for reloading Amazon gift cards.

So if you put $50 on a gift card, Amazon will add 2 percent — $1 — to the card balance. As a result, you will be able to buy $51 worth of goods or services on Amazon for $50. If you shop at Amazon often, the savings could add up — but this program isn’t necessarily a good deal.

How Amazon Reload works

The hitch to Reload is that you must cough up both your debit card information and your bank account and routing numbers to participate in the program. Amazon’s explanation: “To fulfill your [gift card] reload faster, we will sometimes route orders through your debit card instead of your bank account.”

While Amazon does not mention it, retailers tend to prefer that shoppers pay with cash, debit card or other noncredit methods. That’s because retailers are generally charged processing fees for credit card transactions, meaning they pay a small fee every time a shopper pays with a credit card — a cost that can quickly add up for retailers.

In fact, the snarky headline on The Verge’s article about Amazon Reload reads, “Amazon is now bribing Prime members to avoid credit card fees.”

The article goes on to explain:

“It’s a smart move by Amazon, as it lets the company avoid pricey credit card fees. Those fees usually add up to more than the 2 percent Amazon is offering customers as a bonus; so the company is both making a savings and passing some of it along to customers.”

The pros and cons of Amazon Reload

Earning an extra 2 percent in gift card money that you can spend at Amazon or any other retailer is nothing to scoff at. Turning down that opportunity would be like turning down the chance to earn 2 percent cash back.

So if you currently shop at Amazon but don’t earn any type of rewards for doing so, you should consider Amazon Reload. But also look into other options available to you for earning rewards or Amazon purchases — there are better ones.

For example, if you are an Amazon Prime member and already have or qualify for an Amazon Rewards Visa Card or the Amazon.com Store Card, consider either of those options before pursuing Reload. These cards offer 5 percent back on Amazon purchases.

And those are just two examples of rewards credit cards that offer more than 2 percent — check out the Money Talks News credit card search tool for more.

You should also know before jumping on Reload that paying by credit card is generally considered safer than paying by debit card due to how federal law treats such transactions. We explain this further in “7 Ways to Guard Your Wallet — and Identity — When Shopping Online.”

Bottom line: At Money Talks News, we are generally advocates of the massive savings you stand to score as an Amazon Prime member. See “8 Major Freebies and Discounts You Get With Amazon Prime.”

But even if you are already a Prime member, Reload is not necessarily worth your while. It is, however, a great reminder that you should shop around to find out if you could be earning more rewards that you currently do for purchases from Amazon — or anywhere else.

What’s your take on Amazon Reload? Sound off below or on our Facebook page.

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