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.

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.