The use of Gift Cards

[cunnorl]

    I have seen many posts on  other forums about the use of gift cards to pay down balances. My question is if a trip has to be cancelled, what happens? I heard that insurance does not cover the amount that was purchased with gift cards.

    Thank You for all your assistance.

[klfrodo]

If you're entitled to any refunds paid with gift card, they re-issue a new card or sometimes refund to the gift cards.

 

[sandiego1]

If you cancel the cruise after final payment or during the penalty period, most trip insurance will not reimburse you for the amount you paid for the gift card.

[Jersey42]

11 hours ago, sandiego1 said:

If you cancel the cruise after final payment or during the penalty period, most trip insurance will not reimburse you for the amount you paid for the gift card.

@iamtrustworthy - Is this true in general? If so, are there exceptions with any of the policies you sell? What kind of wording should one look at when reading a policy to determine how it treats payments by gift card?

 

Many people who pay for a cruise with gift cards do it to save 10%.  If trip cancelation coverage will not reimburse you for the cost of gift cards, then people need to weigh the 10% discount vs not being able to get cancelation (and interruption) coverage.

 

If the gift cards are not insurable, here is another question if someone wants medical, evac and other coverages. How do I calculate my non refundable trip cost if most payments are made with gift cards? This might be important for many plans to get a pre existing medical conditions waiver or to get CFAR coverage. 

[HBDave]

My current policy reads....

 

"Payments and Deposits or portions of Payments and Deposits satisfied by non-paid vouchers, non-paid certificates or discounts are not considered Payments and Deposits under this Policy"

 

I'm assuming Gift Cards you purchased are not considered non-paid vouchers or non-paid certificates.

 

I think they're trying to exclude payments like a Future Cruise Credit you received due to an issue you had on a prior cruise, etc. Something of value, but that you didn't pay for.

Edited July 15, 2023 by HBDave

[sandiego1]

My BH policy has wording about payments to Travel Suppliers.

Travel Suppliers are defined as:

“Travel Supplier” means the tour operator, Hotel, rental company, Cruise line, or airline that provides pre-paid travel arrangements for the Insured’s Trip.

 

Since the discounted HAL gift cards are usually purchased through AARP or BuyATab, they aren’t a travel supplier and therefore, not covered.

[Babr]

26 minutes ago, sandiego1 said:

My BH policy has wording about payments to Travel Suppliers.

Travel Suppliers are defined as:

“Travel Supplier” means the tour operator, Hotel, rental company, Cruise line, or airline that provides pre-paid travel arrangements for the Insured’s Trip.

 

Since the discounted HAL gift cards are usually purchased through AARP or BuyATab, they aren’t a travel supplier and therefore, not covered.

 
I don’t think it has to do with Travel Supplier. I think the problem may be that the T & C of the AARP cards states that the cards have no cash value so it is not recognized as a form of payment in some policies.

 

It used to be that way for vouchers and FCC. Since COVID, some companies have changed their policies to insure these now but only in the amount you actually paid, not any excess value from bonus or incentive vouchers/ FCCs granted by the cruise line.

 

I don’t know how that applies to gift cards. If it is not specified in the definition of Payments and Deposits as described by @HBDave, then you’d have to ask. At best, they’d cover the percentage you paid, not the discounted amount.

[iamtrustworthy]

On 7/8/2023 at 9:58 PM, sandiego1 said:

If you cancel the cruise after final payment or during the penalty period, most trip insurance will not reimburse you for the amount you paid for the gift card.

Hi sandiego1,

 

Sorry about the delay responding. I thought I had already answered you.

 

I can't speak for all companies, but all my plans will reimburse your prepaid non-refundable trip costs if you are cancelling or interrupting your trip for a covered reason.

 

However, if the cruise line is giving you your money back to the gift card, then there's no financial loss that needs reimbursing.

 

Steve Dasseos

[iamtrustworthy]

On 7/18/2023 at 12:42 AM, iamtrustworthy said:

Hi sandiego1,

 

Sorry about the delay responding. I thought I had already answered you.

 

I can't speak for all companies, but all my plans will reimburse your prepaid non-refundable trip costs if you are cancelling or interrupting your trip for a covered reason.

 

However, if the cruise line is giving you your money back to the gift card, then there's no financial loss that needs reimbursing.

 

Steve Dasseos

Hi all,

 

I need to clarify this because I see there's another way to interpret my answer that I didn't intend to convey.

 

If someone has gift cards and they are using them to prepay a trip cost that is 100% non-refundable should the trip be cancelled on the departure day, then the value of the cash paid for the gift card needs to be insured in most cases when someone wants the Cancel For Any Reason coverage and / or the Pre-existing Medical Condition coverage.

 

The reason I said "in most cases" is because there are a few companies that don't require the full non-refundable trip costs be insured to qualify for the Cancel For Any Reason coverage and / or the Pre-existing Medical Condition coverage.

 

I hope this makes better sense.

 

Steve Dasseos

 

 

[Gail & Marty sailing away]

Thanks Steve for all your help.😀 .