While you might be thinking of ways to spend your tax refund, you should first decide how you’re going to get your money back. Pre-paid debit cards can be a quick and easy option, but you have to know the pitfalls.
We got complaints from several people about the Nexis pre-paid debit card issued to customers at a Jackson Hewitt franchise on Farmington Avenue in Hartford.
Jacqueline Ayuso, manager of the Jackson Hewitt franchise, admits the Nexis pre-paid debit card they put tax refunds on last season was a bad deal for customers.
“They were getting ripped off by this card. There was money being held and money that wasn’t accounted for, ” Ayuso said. “I had to call the Nexis card myself for some of my clients to see what is going on. So some of them were reimbursed and some of them just lost money with this card.”
Monique Douglas and Jeanine Thornton said the Jackson Hewitt franchise offered the Nexis card as a fast alternative to waiting for a check. The card was handed out on the spot by the check cashing place that used to be right at the office. However, they said they weren’t told about all of the fees.
“I was completely blindsided because I wasn’t expecting so many fees,” Douglas said.
“Every time I used this card I got charged,” Thornton said. “If I went to the store and purchased something with the card, I got charged. If I went to the ATM, I got charged. If you need to check your balance, we’ll charge you for that.”
The card also charged fees like $5 to activate the card, $10 to get a statement mailed, and if you need to speak with customer service, that’s $2. Douglas said she was slammed with the biggest fee before she even used the card.
“A hundred and something dollar one-time processing fee that was taken for them putting the money on the card,” Douglas said.
If she had known about the processing fee for direct deposit, she would not have gotten the card, she said.
The manager, Jacqueline Ayuso, disagreed and said they told every customer about the fee that took 2 percent of the total tax return off the top, and customers signed to authorize it. However, she adds they didn’t tell customers about all of fees.
“We didn’t know once they left what was going to happen with all these fees and stuff,” Ayuso said.
A former Jackson Hewitt employee told the NBC Connecticut Troubleshooters they knew about all of the fees, but pushed the card on customers anyway so they could win a bonus. Ayuso agrees there was an incentive to sell the Nexis card.
“Because everybody in other stores were trying to see how many cards they could sell because there was a bonus given if we sold an amount of cards,” Ayuso saud.
The manager added that they have gotten rid of the Nexis card after last year’s tax season because they had so many complaints about it.
They’re now using the American Express Serve card that corporate Jackson Hewitt locations tell Troubleshooters they are using this year. It doesn’t have nearly as many fees and it lists them right on the card. Most transactions are free of charge.
“Some people did complain about it and I did bring it to my bosses attention and that is why he chose to say you know what, I am not liking this card,” Ayuso said. “You know we thought it was going to be a good card.”
H&R Block, Turbo Tax, Walmart, and other companies also offer cards with fewer fees than the Nexis card. However, we still found they all have some sort of fees.
Thornton said she won’t use a pre-paid debit card to get her tax refund again. This year, she said she will get her tax refund by direct deposit.
Ayuso suggests people think about their options carefully before they decide on how to get their tax refund.
“I would tell customers always read up on your cards,” Ayuso said.
If you choose to get your tax refund by check or direct deposit into your bank account, there should be no fee to do it.
We reached out to Metabank, which issues the Nexis card, and they said they are going to work with Monique about the fees she has been charged.