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Customer Review

36 of 56 people found the following review helpful
3.0 out of 5 stars Price increase without being straightforward about it, October 22, 2013
Verified Purchase(What's this?)
This review is from: Xbox $5 Gift Card - Xbox 360 Digital Code (Software Download)
This change from 'points' to real money was supposed to be no big deal in a gamer's world, however, what they didn't explain clearly is that tax is removed from the value of the new 'gift card'. My sons are long time gamers and were have purchased more microsoft points than I ever imagined we would.
In the past the value of the card was XX dollars for XX points. Very straightforward and easy for them to determine how many points they need to purchase for the options the want.
Now we just completed our first and then second 'gift card' online code purchase because, after purchase tax was deducted from the gift card, leaving less than what was need for the options.
This is a sneaky way for Microsoft to raise the price of the virtual points without actually admitting it. I call that sketchy at best. My sons work hard and save their money for the things they want. We all learned lesson tonight.
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Showing 1-10 of 12 posts in this discussion
Initial post: Oct 22, 2013 4:40:02 PM PDT
Last edited by the author on Oct 22, 2013 9:51:48 PM PDT
Kilo Delta says:
You described it as "tax is removed from the value of the card". That was not true for me when I bought this gift card on Amazon - the $10 gift card is still worth $10 to Microsoft, but I had to pay sales tax on it (WA state). When Amazon sold the Xbox "points card", I didn't have to pay sales tax on it. I think this is just Amazon's error of mistakenly collecting sales tax on this new Xbox gift card, because the purchase of gift cards is actually exempt from sales tax. And even Amazon's sales tax policy says this: "Note: No sales tax is charged when purchasing gift cards; however, purchases paid for with gift cards may be subject to tax."

Either way, this isn't Microsoft being sneaky about getting more money from you. It's sales tax. Microsoft doesn't get to keep sales tax money.

Posted on Oct 23, 2013 2:27:04 PM PDT
Kilo Delta says:
Update to my earlier comment - I contacted Amazon and asked if it was a mistake that they were collecting sales tax on these Xbox gift cards, and here's their reply:

Thank you for your inquiry regarding gift cards. You are correct that gift cards are exempt from sales tax. I apologize for the inconvenience this has caused. We are working on resolving this issue.
Until then, after your order is placed and the shipment is complete, please contact us and we'll issue a tax refund.
I hope this helps. We look forward to seeing you again soon."

So, Live, Laugh, Love... you might want to contact Amazon regarding your order of this Xbox gift card and ask for a refund of the sales tax since it was erroneously collected. It worked for me.

(Note: If you're wondering why this customer service person didn't just refund the sales tax on my order right away, it was because I had contacted them through an account that I didn't buy the gift card on. Silly me.)

In reply to an earlier post on Oct 23, 2013 7:42:40 PM PDT
Thank you for following up and your replies to me. I know that I'm always paying sales tax,no matter if its included or added to the cost. The problem we have have is after purchasing gift card points, the card value was reduced by the tax rather than charging tax upfront .
Amazon didn't over- charge us, Microsoft did, by reducing the value of gift card by the tax amount. I have emailed them concerning this with no response received.

In reply to an earlier post on Oct 23, 2013 8:13:11 PM PDT
Last edited by the author on Oct 24, 2013 11:42:09 AM PDT
Kilo Delta says:
EDIT: 2 days later, now I finally understand what you were saying. When I paid Microsoft for games or DLC with a *points* gift card, Microsoft didn't have to collect local sales tax, and I didn't have to pay sales tax when I bought the "points" gift card either. Now that Microsoft has switched to currency, they have to collect local sales tax when I buy digital content.

You're right, it's a hassle to buy a $20 gift card for a $20 game, only to find that I still need to use a credit card on the Xbox game store to pay the $1.60 for the sales tax. (However, I still say this isn't Microsoft being sneaky & raising the price - it's Microsoft collecting sales tax on behalf of the state because now they have to.) But for me, the points system wasn't perfect either because I always had an odd amount of points left over in my balance that I couldn't use - like when I had to buy 800 points from Microsoft when I only needed 480 points for what I wanted to get - that sort of thing often happened to me. Both the points and currency systems have their pros and cons, it seems.

In reply to an earlier post on Oct 26, 2013 4:53:56 PM PDT
Looptuna says:
I just got burned by this as well, but the 1600 point cards (worth $20) are listed as now costing $35, which is ridiculous. I now have to buy an additional $5 credit to pay the sales tax (and keep a relatively unspendable $3-$4 in the account) or put my credit card on my XBox account to pay the tax. I'm not willing to do that. This is the first and LAST console I'll ever indulge with this stupid $5 incremental spending limits.

Worst thing for me is I always total up my yearly Amazon purchases to pay the sales tax I legally owe. On this particular product, I'll be paying tax on the Amazon purchase AND on the game I buy with it unless I remember to subtract it from the total. It is not worth the hassle.

In reply to an earlier post on Oct 26, 2013 8:07:55 PM PDT
Core says:
Well hey, everyone bemoned the fact that Microsoft was using "points" but it could only be to harm us gamers... when in fact it turns out Microsoft was helping us gamers out a little... anyways most people got what they wished for "Currency" so... meh..

In reply to an earlier post on Oct 28, 2013 10:44:10 PM PDT
J. Gelling says:
I'm trying to understand this and want to make sure I'm getting it. Are you saying you bought a $5 digital code, that Amazon charged you $5 without tax, but when you redeemed the code that it added less than $5 to your account?

If so, it could be a mistake on MS side. I literally just bought a $10 digital code, paid exactly $10 with an Amazon gift card and redeemed it for exactly $10. I proceeded to buy an XBLA game on sale or $2.49 and exactly $2.49 was removed from my account balance. Your situation seems very odd to me.

In reply to an earlier post on Oct 28, 2013 11:58:59 PM PDT
Kilo Delta says:
J. Gelling, am I right that you live in California? Digital content sales (aka "electronic data products") in California are exempt from sales tax, so Microsoft didn't add on sales tax when you bought that $2.49 game. =) Where I live (WA state), we pay sales tax on digital sales of e-books, music, and video games - for me, that $2.49 game ends up being $2.70 total. "Live Laugh Love" lives in a state where the sales tax law is similar to mine. So if Live Laugh Love bought a gift card in the same amount as the price of a Xbox game (like a $20 gift card to buy a $20 game) they wouldn't have enough to complete the purchase, they'd have to come back to Amazon and buy a $5 gift card to cover the $1.50 or so in sales tax. I think that's what they didn't like about the gift card (when we paid with "points", Microsoft didn't need to collect state sales tax - the 1600 point gift card paid for the 1600 point game).

I hope my explanation makes sense. =)

In reply to an earlier post on Oct 29, 2013 4:17:30 AM PDT
J. Gelling says:
I guess it was the wording where it sounded like money was removed from the redemption code or that it was reduced in value that threw me. Thanks for the info.

Posted on Nov 2, 2013 11:50:37 AM PDT
Last edited by the author on Dec 8, 2013 11:34:45 AM PST
I just experienced this the other day, but with a weird result. While NY sales tax is supposed to be a minimum of 4% and in NYC it's 8.875%, I was charged 13 cents extra on a $4.99 purchase, which would seem to be a 2.5% rate. I assumed this was a WA (Microsoft's location) sales tax, somehow, but now I don't know what that rate could be. Just FYI for New Yorkers, possibly specifically for people in NYC.

EDIT: I was charged 8.875% tax on my last 2 purchases, so I have no idea what that 13 cents on my $4.99 purchase was all about, but it's been normal sales tax now.
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