The government issued a news release saying the payday loan company "voluntarily suspended the gift card exchange pilot program," which Money Mart had defended earlier Friday as a convenient "value-added" service for its customers.
"After this came to my attention yesterday, my office reached out to Money Mart," Consumer Services Minister David Orazietti said in the late-day release. "The ministry is looking into this issue further and will examine if there needs to be increased regulation around the re-selling of gift cards."
The government wants to ensure "a high standard of consumer protection," added Orazietti.
Ontario's New Democrats, who raised the issue during question period Thursday, said they were glad public pressure had forced Money Mart "to do the right thing and suspend this greedy program."
Money Mart was a "horribly misguided" Grinch for launching the cash-for-gift-cards scheme during the pre-Christmas period, when many charities give their very low-income clients the cards, NDP consumer critic Jagmeet Singh said in an interview Friday.
"It's actually preying on very vulnerable people," he said. "It may not be actually criminal, but it's morally criminal."
Ontario's Progressive Conservatives had accused Money Mart of "highway robbery," and like the NDP, demanded that the Liberal government immediately stop the practice.
"It's a sad indictment of society that we're allowing it to happen, so the government needs to shut it down right away," said interim PC Leader Jim Wilson.
Orazietti warned Thursday that regulating cash-for-gift-card plans was a "tough" issue because people trading something they own for less than face value may not be any of the government's business.
The NDP said even though the program was suspended Friday, it still wanted the government to investigate how Money Mart was allowed to get away with "this morally corrupt practice" and take action to ensure it doesn't happen again.
"This pilot project was wrong from the start," said Singh.
Money Mart, which has branches across Canada, did not respond to questions about how it makes money off the gift cards or if it sells them back to the original retailers.
"I don't know what their economic model is," said Singh. "I just know that whatever it is, it's wrong."
A statement issued by the New York public relations firm ICR early Friday morning did not directly address accusations that Money Mart was preying on vulnerable members of society.
"Money Mart believes it is offering customers a convenient, value-added product though this service," said the statement, which was issued after midnight.
"Money Mart, like other retailers, is offering a service under which it purchases merchant gift cards from customers who don't want to purchase the products offered by the gift card merchant."
Follow @CPnewsboy on TwitterSuggest a correction