January 2008 rang in new laws governing gift cards and gift certificates. While some items remain the same, changes have been made. As a retailer, these changes impact you.
To keep it simple, we've highlighted what has changed, what hasn't, and why it matters.
What Has Changed:
- Gift cards and certificates valued at less than $10.00
may be redeemed for cash.
- "Cash" includes currency, check, or if the
parties agree, electronic funds transfer to the
customer's bank account or his or her wireless phone
account.
The Amended Law Does Not Apply To:
- Gift cards and certificates that were issued to the
consumer as part of an award or other promotional program
without anything of value exchanged.
- Gift cards and certificates donated or sold below face
value to a non-profit organization.
- Gift cards and certificates issued for perishable food
products (but not restaurant gift cards or
certificates).
What Has Not Changed:
- Where gift cards or certificates are valued at over $10,
you, as a retailer continue to have the option of either
issuing a new card or certificate or redeeming the balance in
cash, at no cost to the consumer.
- Since changes made in 1997, a gift card or certificate
may not be sold with an expiration date or a service
fee.
- However, gift cards or certificates may have an
expiration date:
-
- if they are donated under an awards, loyalty, or
promotional program;
- or if they are sold below face value at a volume
discount to employers or to a non-profit or charitable
organization for fundraising purposes , as long as the
expiration date is not more than 30 days after the date
of sale.
- if they are donated under an awards, loyalty, or
promotional program;
Why This Matters:
Failing to implement these changes correctly and across all outlets leaves your company vulnerable to class action lawsuits by consumers. Educating your employees about how to properly process gift cards and certificates is your best protection.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.