The buzz today regarding the death of Vanilla Reload cards was triggered by emails from American Express to Serve and Bluebird cardholders. Customers received emails like this one (bolding is mine):
We are writing to inform you of some changes to the terms and conditions of your Bluebird® Account. Please review the change below:
InComm Vanilla Reload PIN Package is one of the many ways to add money to your Bluebird account. Starting April 1, 2015, the Incomm Vanilla Reload PIN Package will no longer be available for purchase. Any previously purchased Vanilla Reload can still be added to any Bluebird account.
You can still add money to your account in many free, convenient ways including Direct Deposit, adding cash at virtually any Walmart® checkout register, and more. Click here to learn more.
Thank you, The Bluebird® Team
The way it used to work was that Bluebird or Serve cardholders would go to Office Depot or CVS to buy Vanilla Reload cards with their credit card and load each with the max of $500. Sure, there was a $3.95 fee for each card, but that paled in comparison to the rewards one could get from a credit card that offered a good category bonus for office supplies or drug stores. Customers would then take those cards home and browse online to VanillaReload.com to load the card’s value to their Bluebird or Serve card. Then, Bluebird or Serve could be used to pay bills, withdraw cash to bank accounts, and more.
After a while, Office Depot stopped allowing credit cards for these purchases. Then, about a year later, CVS did the same. Both chains cited fraud as the reason for their decision. Today, there are still some stores that will let customers buy Vanilla Reload cards with credit cards, but those are few and far between.
The other reload card
Before Vanilla Reload cards existed, there were Greendot MoneyPaks. They cost a bit more ($4.95 vs. $3.95), but were otherwise basically the same idea as Vanilla Reload cards. Unfortunately, crooks have found ways to use these cards to swindle people out of their money; to launder stolen credit cards; and more. As a result, GreenDot announced in July that they would phase out MoneyPak cards early in 2015. Instead of buying MoneyPak cards, people would be able to bring their prepaid reloadable cards (e.g. Serve, AccountNow, and many others) to stores that previously sold MoneyPak cards in order to “swipe reload” their cards at the register.
In my post on this topic, I wrote:
This is potentially a better solution for mile collectors than the CVS / Office Depot solution of not accepting credit cards for reload card purchases. If you know of a store that currently allows credit card purchases of MoneyPaks, then swipe reloads might also be possible with a credit card.
In other words, if swipe reloads are more secure than reload cards, crooks may have less opportunity to ruin the good thing that mile collectors have been enjoying as they did with Office Depot and CVS.
Back to Vanilla…
The first announcement about the discontinuation of Vanilla Reload cards didn’t come from American Express emails to Bluebird and Serve cardholders. InComm (the company behind Vanilla Reload cards) announced this change on November 5th. You can read about the announcement here.
The announcement specifically called out the end of Vanilla Reload cards, and specifically called out fraud prevention as a reason:
InComm’s swipe reload program eliminates opportunities for fraud and scam artists to take advantage of unsuspecting customers through the use of reload packs. As part of this effort, the company will remove reload packs from all retail stores by March 31, 2015.
Two positive messages from Incomm…
While the upcoming demise of Vanilla Reload cards is bad news for those few with a good source of reload cards that can be bought with credit, I think there is reason to be optimistic about new opportunities arising. Here are two messages that I get from InComm’s announcements:
The number of locations for swipe reloads is increasing rapidly
The announcement says:
InComm, a leading provider of integrated point-of-sale (POS) technology solutions to retailers, announced plans to add over 15,000 more swipe reload locations to its Vanilla Reload network
I believe this means that Incomm has signed up at least one, if not several, major retailers that weren’t part of their network before.
Reloads go upscale
InComm has found that reloadable cards are going mainstream. In this announcement, InComm wrote about “GPR” cards, which are “General Purpose Reloadables” like Bluebird and Serve (bolding is mine):
Previously,GPR cardholders tended to be un- or underbanked consumers. This is no longer the case. According to new research, GPR usage is significantly accelerating among middle and higher income households that have checking accounts. These consumers are seeing multiple benefits of using GPR cards, including easier budget management and security.
So, InComm has signed one or more major new partners. And, InComm is going out of its way to say that these products are not just for the poor anymore. I believe this means that there’s at least one major new partner that typically serves middle and higher income households. Starbucks, perhaps? And, whoever they are, will they take credit cards? I’m hoping and betting that the answer is yes.