New Federal Laws concerning gift certs

[???? ???? ???? ??j?]

I got an email from Spaboom about new Federal laws concerning gift certificates. Did anyone else see that?

My question is this:

It appears that if your certificate isn't sold as a dollar amount, the new laws don't apply. Am i reading this wrong?

Seriously, all the laws that relate to GC's make me want to stop selling them.

And do fed law trump state law?

 

[Left-T]

New Federal Laws concerning gift certs

I have not seen or heard this, though I haven't been checking.
Is there a way you could copy and paste the email to the forum?

 

[Ilove P]

New Federal Laws concerning gift certs

Correct me if I'm wrong, but I think you mean the amendment that went into effect on Aug.22 2010 and was recently added to the 2009 credit card law. You can read the government document here:

http://www.house.gov/apps/list/press/financialsvcs_dem/21malone_011_xml.pdf


And....in English...here:

http://www.franchise-update.com/article/1162/

 

[------ -]

New Federal Laws concerning gift certs

Seriously, all the laws that relate to GC's make me want to stop selling them.

I feel the same way! If only the law applied to big business, or at least to spas with employees & the like that would be one thing. But as a 1 woman show or even a 2 to 3 person practice, it becomes a burden to have to deal with GC's beyond a few months to a year. I rarely sell them & don't make a huge effort to do it either - so honestly it's not that big an issue for me - but still I've always thought that if a person who receives a certificate really wants to use it that a year is more than enough time to schedule their session!!!

 

[0sm0di0r]

New Federal Laws concerning gift certs

It appears that if your certificate isn't sold as a dollar amount, the new laws don't apply. Am i reading this wrong?

I believe this is correct!

Seriously, all the laws that relate to GC's make me want to stop selling them.

Ditto. I have been toying with the idea of discontinuing them for a while, and this has made that decision alot easier! I do actually sell ALOT of them, so it will be kind of a bummer, but I'm over it.

 

[scaerdrys]

New Federal Laws concerning gift certs

I feel the same way! If only the law applied to big business, or at least to spas with employees & the like that would be one thing. But as a 1 woman show or even a 2 to 3 person practice, it becomes a burden to have to deal with GC's beyond a few months to a year.

It's a burden for everyone - stupid is stupid, regardless of the number of employees. Larger businesses can't "afford" to comply with government bureaucracy any more than you can. every minute and dollar wasted is a minute and dollar not spent productively.

 

[REALIST L]

New Federal Laws concerning gift certs

And do fed law trump state law?

In most cases, state laws outrank federal laws (IF there is a state law concerning a subject, that is. If not, then the federal law rules.)

 

[fresh to death [:]

New Federal Laws concerning gift certs

Correct me if I'm wrong, but I think you mean the amendment that went into effect on Aug.22 2010 and was recently added to the 2009 credit card law. You can read the government document here:

http://www.house.gov/apps/list/press/financialsvcs_dem/21malone_011_xml.pdf


And....in English...here:

http://www.franchise-update.com/article/1162/

Thanks for the links. I still feel like I don't completely understand the new amendment though.

 

[Cathy S]

New Federal Laws concerning gift certs

HEre is a copy of the email I got from Spaboom:

Dear Tiffany,

This Sunday, August 22nd, the new federal gift certificate law goes into effect. While you may follow federal legislation with heated interest, we have burned lots of midnight oil to learn about the new law so you can keep on running your business. This email will explain the basics of the law and the changes we have made.

New Gift Certificate Expiration Terms: The new law sets a five-year minimum term for most gift certificates sold in the United States. The new law does not shorten any minimum terms required by state law. The new law only lengthens terms that were previously less than five years to the new federal minimum term. If your state had a minimum term of seven years (I'm talking about you, Mass.), or does not permit any expiration date (CA, CT, FL, ME, MN, MT, NH, RI and WA), those terms still apply to your gift certificate sales. Otherwise, your new minimum gift certificate term is five years from date of issue, with a few exceptions.

What SpaBoom is doing to help you comply: After carefully studying the new rules we are making substantial changes and enhancements to our system to help your Instant Gift Certificates comply with the new law. Below is a summary of the changes we are making to the SpaBoom system, broken out by type of certificate. Starting this Sunday our system will handle expirations as follows, but please note that we are not changing any expiration dates for Instant Gift Certificates sold before August 22nd.

Dollar Value Gift Certificates: If your expiration date is set to less than five years, we will automatically change it to be five years from the date of issue. If your state forbids expiration dates, or requires a term greater than the new law mandates, we will set your gift certificate term according to our current understanding of your state's gift expiration law. We are using data provided by the National Conference of State Legislatures.

Service Gift Certificates: Gift Certificates redeemable for a service rather than a dollar value are not regulated by the new law. Therefore we will set the expiration dates for service Instant Gift Certificates according to our understanding of your state's expiration law.

Promotional Gift Certificates and Rewards: Gift certificates that are promotional or issued as part of a reward or loyalty program are exempt from the new federal expiration terms provided they meet certain requirements. Instant Gift Certificates sold at a discount through the SpaBoom system, given to charities or as rewards are labeled "Reward" on the face of the certificate.

Discounted Certificates: All Instant Gift Certificates sold at a discount will give you the option to create two expiration dates; the first expiration date is the date the promotion expires. You may set that date for any time period permitted by state law. Our default is one year. Those discounted certificates will also state "Funds expire on [date]". The funds expiration date is set according to our current understanding of your state's expiration law. For example, if you sell an Instant Gift Certificate with a face value of $50 for $40, the right to redeem it for $50 could expire in 90 days but you would be required to redeem it for $40 (the purchase price) for the minimum term your state law requires.
Free Gift Certificates: If you give an Instant Gift Certificate to a charity or organization it will be labeled "Reward" and you can set any expiration date you like for them. Be advised that some states (FL, LA and OR for example) require free gift certificates to be valid for minimum terms. The new federal law does not have any expiration requirements for such gift certificates. Our default is one year.
Offers: These are Instant Gift Certificates issued as rewards such as Buy-One-Get-One offers, or offers for a discounted purchase or free item (e.g., email, anniversary and birthday offers). You can set any expiration term for offers subject to state law. Our default is 60 days.
Things you should do: Neither this email nor any part of our services or system constitutes legal advice or opinions. Furthermore, we have not conducted exhaustive research into the laws of every state. Please check your state laws regarding gift certificate expiration and consult your accountant or legal counsel if you are unsure about how those laws apply to your business.

Please contact us for questions. If you are interested in learning more about the new gift law in glorious detail, check out our blog early next week when we will post a lengthy explanation of the Credit Card Act and how its gift provisions applies to small businesses.

 

[just me being bored]

New Federal Laws concerning gift certs

I don't sell GC for a dollar amount. And I don't really sell a lot maybe 25 a year. I am with all of you just one more headache to deal with

 

[filmmaniac111]

New Federal Laws concerning gift certs

I won't be selling for dollar amount anymore and reconsidering using Spaboom. I don't mind selling certs to clients who give them to other clients (spouses) because I know they are being used pretty much immediately.

 

[weddingdressesunnf]

New Federal Laws concerning gift certs

Softy, thanks for sharing that email from SpaBoom.

Since our state requires that the funds used to purchase expired, unredeemed gift certificated must be turned in to the state as "unclaimed funds", we don't set an expiration date on our GC's. We do only sell services, not dollar amounts, so the new regulations wouldn't apply to us anyway (confusing as they are).

I have, however, recently (FINALLY!) understood the notion that if a gift certificate was a donation (and not purchased; ie. no money changed hands), then we MAY put an expiration date on it. I need to discuss this concept with my business partner (Hubby), and make appropriate notes where necessary. I'm generally the only one handing out donated GC's anyway, LOL!

 

[Iyan]

New Federal Laws concerning gift certs

Thank you for your imput (to all of you!) and thank you tiffany for posting the email you got from spa boom.

I don't sell many GC's myself, but the ones I usually sell are for a service, not an amount. I've always liked seeing a service or string of services listed rather than a $ amount in recieving GC's because I feel like the person giving it to me took the time to think about what I would really like rather than just "giving me money." my two cents about that haha!

I will continue with only listing the service, and reminding the buyer that the recipient will in the end have their choice of service with in the same price value, can pay the remainder of services that cost more, or that they can use partial credit until the amout of the original cert is met.

Good info though. I am glad it has been brought up!

 

[HannahSaysHii<3]

New Federal Laws concerning gift certs

This website gives some great info on both state and federal laws concerning gift certs. From what I can see, the site is up to date (September 3rd, 2010) and has some great information to look up for whatever state you're in.

http://www.ncsl.org/IssuesResearch/...tificatesLegislation/tabid/12474/Default.aspx