spinoff: How do you feel about G/Cs having expiration dates

[Michelle2love]

Stonegirl's thread about new laws in her state mandating long gift-certificate expiration laws got me thinking (look out!).

In my state, gift certificates and gift cards may not legally have an expiration date. (You can "retire" a GC or card if you wish, and not honor it, but if you do that, you have to refund the money to the purchaser, or send the purchase price to the state's Unclaimed Property office so they can pick it up if they want it.)

I am so accustomed to this that it doesn't bother me. Although I strongly encourage clients and gift recipients to redeem their GCs ASAP, I am used to having GCs on the books for a long time, and have figured out the fine print to cover situations like rate increases since time of purchase, transfer of certificate, splitting time, cancellation policy, etc.

For those whose states allow an exp. date, do you use one? For those whose states don't allow an exp. date -- how do you feel about that, and has it impacted how you sell GCs?

I have heard mention more than once that outlawing or lengthening GC exp. dates hurts small business, and I'd like to hear more about that too.

Even before our comprehensive law went into effect, I didn't use an exp. date on GCs. Somehow I couldn't wrap my head around getting money for something and then making a decision not to provide it (while keeping the money). (I didn't like it when big stores "expired" gift cards I had paid good money for!) But I know the reasoning must be more complicated than that and I'd like to hear perspective on it.

Thanks!

 

[Pompal 09.]

Oregon passed a law about expiration dates recently. The only exception is if you sell a GC that is discounted from you're usual price? There are rules about the font size of the ex. date, and has to be at least a month out I think?

Even before I've always honored them when people come in with "expired" GC. Sort of the same thinking as you Beccy. I'm amazed at how many don't ever get redeemed at all. (I thought it was just my husband that would lose his GC's!)

I do find the book keeping to be a pain when they are old, old, old.
Beccy wrote:

I am used to having GCs on the books for a long time, and have figured out the fine print to cover situations like rate increases since time of purchase, transfer of certificate, splitting time, cancellation policy, etc.

How do you handle these situations, Beccy? Especially price increases since time of purchase? I often get people booking GC massages and I don't know until the time they pay that they are using a GC, so I wouldn't have an opportunity to give a heads up about any price changes? Just curious.

 

[neil the grey wolf]

I always ask when a new person is making an appt, if they are paying w/a GC. But I also sell onlyl a few GCs, so I usually also know ahead of time if it's a GC redemption.

The fine print on my GCs reads:

-Not redeemable for cash
-Must present original certificate to receive goods/services
-$XX maximum service redemption value
-This certificate is good for one 60-minute session at time of purchase; dividing time into separate sessions will incur an extra charge
-Price increases since date of purchase may be payable at time of redemption
-Cancellations with less than 24 hours notice void this certificate

It's as lot to get on there, but it really helps to be able to show that it's all spelled out. Then if I do bend my "rules" a little, the client ends up feeling I've been generous.

 

[Trust Me]

Excelent wording. Thanks for sharing it!

 

[Faith S]

Althoug I have been selling GCs for about a year now, I am just getting into the legal end of it (oops!)
Aparently in SC you can have an expiry date of no less than 12 months from the date of purchase.
As far as fees, it states that unless a fee is disclosed (on gc, recipt, cover etc) fees are prohibited.
I haven't read anything specific about non redemption rules yet... But I have read some things about unclaimed property rules.
it varries from state to state (obviously) Rather than issuing a chargeback to the original purchaser you report the unclaimed property to the state. :shocked:
I didn't know I was supposed to do either?? I still don't know if my state requires either... Need to do more research!

 

[Pompal 09.]

spinoff: How do you feel about G/Cs having expiration d

I have heard mention more than once that outlawing or lengthening GC exp. dates hurts small business, and I'd like to hear more about that too.

i don't understand this comment at all! how in the world does this hurt small business? (i asked this same thing in the other post)

my feelings on g/c expiration dates are that g/c's should never be allowed to expire. the exception being if the gift card was donated.

i don't want to be in the business of taking someone's money and not providing the service that was paid for. i don't see why anyone would want to do this.

 

[bunky]

I put an expiration date on my GC's but I would still allow people to use them after they expired. Since I already have their money I would rather make someone happy then ticked. However, I feel that the expiration date is still necessary, otherwise they will never come in.
In our state one lawmaker proposed turning the money for expired GC's to the state minus your recordkeeping expenses. thankfully it didn't pass. In my case it would've hurt me since even though I put an expiartion date on the GC I would still let people use them. 3-4 wks ago I had 3 certificates from 2006!!! If that law had passed, I woudln't have been able to honor them since the state would've taken that money.

 

[Naughty no more!]

GC laws website

This might be handy for those who don't know / haven't checked what the laws are in their state - all states are listed:

http://www.ncsl.org/programs/banking/giftcardsandcerts.htm

 

[dingding]

In our state one lawmaker proposed turning the money for expired GC's to the state minus your recordkeeping expenses. thankfully it didn't pass. In my case it would've hurt me since even though I put an expiartion date on the GC I would still let people use them. 3-4 wks ago I had 3 certificates from 2006!!! If that law had passed, I woudln't have been able to honor them since the state would've taken that money.

From: http://www.campcobalt.com/news/gift-certificates-escheat-oh-shoot

"As a general rule, most states that have gift certificate escheatment allow the gift certificate owner 5 years in which to use the gift certificate (though some are seven years). Currently, the following states have these laws on the books: Alaska, Arkansas, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Vermont, Virginia, Washington, Montana, Connecticut, Delaware, D.C., Georgia, Hawaii, Nevada, New Mexico, New York, North Dakota, Ohio and Wisconsin."

If you live in any of the states listed above, techincally, you are required to send in old gift certificate money after 5 years. The states just want the money so they collect interest on it, plus they figure it will remain unclaimed.

 

[A Concerned Friend]

To clarify the above -- you are generally required to send the money to the state if you cannot find the GC owner to refund them their money. In many "escheatment" states you do have the option to refund.

 

[Pompal 09.]

Oh, here's a super-old thread about expiration dates that discusses some of the legalities (tangent on my own thread LOL)

http://www.massageplanet.com/forum/viewtopic.php?t=1138&highlight=escheat

 

[danibuoy]

What if instead of an expiration date, the certificate had on it a "recommended use by date?" Would that get around this problem?

 

[Emilia V]

Do you mean the problem of an expiration date being illegal? If so, then no. If they're illegal, a "recommended use by" date isn't enforceable, and could be considered misleading if someone wanted to make a stink about it (unlikely).

If you mean the problem of people holding onto GCs forever -- yeah, maybe it would help get them in the door.

 

[Gabbie]

I hadn't been able to find any current information about the law requiring the money be turned over to the state, but I know they were working on trying to pass that as well in Michigan.
I think it's a slippery slope when the government starts telling us what we can and cannot do with things like gift certificates. What's next? It will be illegal to enforce a cancellation policy that required payment if less than 24 hrs notice? Or that payment will have to be turned over to the state? It shouldn't hurt your business, because afterall, you didn't work for that money. :roll:

 

[gunslinger]

Funny story from a chiropractor that I know.

This chiropractor used to have a MT in the office - MORE THAN THREE YEARS AGO! For whatever reason, when his MT left the office he chose to use her space for another office, not a new MT.

This summer, a lady called him and told him that she received a gift certificate for a hot stone massage for Christmas. His CA had to tell her that they hadn't had an MT in the office for at least three years.

That alone should be one reason to incorporate some sort of expiration date on a GC if it is applicable by law.

I'm just wondering who was courageous enough to give a friend a certificate that was at least 4 years old - LOL.

Terry

 

[Poka D]

Funny story from a chiropractor that I know.

This chiropractor used to have a MT in the office - MORE THAN THREE YEARS AGO! For whatever reason, when his MT left the office he chose to use her space for another office, not a new MT.

This summer, a lady called him and told him that she received a gift certificate for a hot stone massage for Christmas. His CA had to tell her that they hadn't had an MT in the office for at least three years.

That alone should be one reason to incorporate some sort of expiration date on a GC if it is applicable by law.

I'm just wondering who was courageous enough to give a friend a certificate that was at least 4 years old - LOL.

Terry

Ditto.

This lady probably had the Gc for 4 years and lied on the phone that she "just" got it. I had people say it to me, too. They would say that they got a GC "for Xmas" but fail to mention it was Xmas of 2005!
I don't understand why it's such a huge problem for people to use their GC within a reasonable time and why we need laws for that.

 

[Ralishev]

for the record, I DO honor gift certificates after the expiration date. Honoring them after the expiration date isn't my issue, being told that I HAVE to have AT LEAST 5 yrs for an expiration date is my problem.

I don't just "take the money and run". The purchaser knows the terms of the gc when they buy it, and it is clearly printed on the card when it expires so the recipient also knows the terms. I have honored every expired gift certificate except for the most recent last week - which I have discussed at length in the private section as to why. edit: although I didn't honor it, I did credit the original purchaser the amount.

also, I think it makes for complications bookkeeping wise.

 

[hhudson]

I've been thinking about this... I suppose if I didn't sell alot of gift certificates, it might not be a big deal. bookkeeping or otherwise.
I just checked for 2007 - I sold $11, 380 worth of gift certificates. For me, keeping that much "open" in my books for 5 years is a BIG hassle. Not to mention, in those 5 yrs, each year I would be racking up similar dollar amounts to be open that year as well.

 

[baseball*dreams]

I don't understand why it's such a huge problem for people to use their GC within a reasonable time and why we need laws for that.

Who's to say what a "reasonable" timeframe is? I'm with Beccy - if a GC has been PAID for - why should the business be permitted to expire it without rendering the service or refunding the purchase price? Sadly, THAT is why we have laws regarding GCs.

I'm in California and GCs cannot expire here, however regardless of the law, I would never consider telling someone with a GC "Sorry, I was paid for that GC too long ago to bother with redeeming it now. Go away." which is what is essentially being told to someone in that instance no matter how it's phrased.

Whoa, whoa, whoa, Pete! Let's not jump into conclusions about each other.

For the record (and as I have stated in my previous post) - even though I put an exp. date on my GC, I will still honor them. I don't just take money and tell ppl to "go away". I have never, EVER turned anyona away just b/c their GC expired. Our state doesn't have laws mandating that and the reason I do this is simple: it's GOOD BUSINESS. I just had 3 people with 2 - 2 1/2 yr old GC's and they all were able to use them. I would let ppl use a 5 year old GC.

That's why I am not crazy about GC laws.

 

[andypandy]

I don't understand why it's such a huge problem for people to use their GC within a reasonable time and why we need laws for that.

Who's to say what a "reasonable" timeframe is? I'm with Beccy - if a GC has been PAID for - why should the business be permitted to expire it without rendering the service or refunding the purchase price? Sadly, THAT is why we have laws regarding GCs.

I'm in California and GCs cannot expire here, however regardless of the law, I would never consider telling someone with a GC "Sorry, I was paid for that GC too long ago to bother with redeeming it now. Go away." which is what is essentially being told to someone in that instance no matter how it's phrased.

Whoa, whoa, whoa, Pete! Let's not jump into conclusions about each other! I don't think I am the reason we need laws regarding GC's.

For the record (and as I said in my previous post) I honor GC's after their expiration date. I have never, EVER turned anyone away. I don't tell people to "go away" just b/c I got their $$ a long time ago. We do not have any laws in our state and I do it because it's GOOD BUSINESS. I understand that as a small business owner I will gain more by making customers happy rather then sticking to the rule book and ticking them off. Especially in a smaller community.

I do NOT like proposed laws (like the MI law mentioned by SG). And that's the exact reason why. I have not had 5 yr old GC's coming in yet but if they did, I would honor them and give the client their massage. If the state were to intervene and tell me that after X number of years I would have to give the $$$ to the state - THEN I would have to tell the person to "go away" and try to get their $$ from the state (you think THAT is goign to be easy? And what are the odds that the state will laos take out a "service fee"?). Or I would have to give them a free massage - I already gave the money to the state. Have you thought about it from this angle? Not all business owners are greedy, some of us actually care about clients and our business reputation and not just want to take the money and run.

The other reason why I don't like the laws is the hype. each time there is a news story, all businesses, good and bad, are lumped together. The comsumers are being told that all businesses are bad. That we all try to take your money and try hard NOT to give you the service and if you don't watch out and and stand up for yourself the bad, sneaky businesses will take advaneforum.xxxe of you.
As a result I get callers who are already in a defensive mood and start arguing with me even BEFORE I have a chance to open my mouth and tell them that yes, you can use your GC. I have had mildly cranky people and I had 3 people in 4 years who made total a$$es of themselves. One guy made the 17 yr old receptionist cry and was using words like "unlawful" and "Consumer Protection Act". All she did was say "I am positive the MT will let you use the Gc but let me double check". Another woman left me a message saying "you better let me use that GC or else" (I still don't know what "or else meant"). The third one literally SCREAMED st me on the phone on December 21 when she wanted to come in on December 22 - when her GC was expiring (thanks a lot, Grinch!) and I didn't have any openings.

Another reason I think the law will be bad for small businesses - MOUNTAINS OF PAPERWORK. You will probably have to submit a zillion reports to the state about sold, expired and redeemed GC's. You may be subject to random audits and I have no doubt that the state will impose a fee for making YOU do all that paperwork. Larger businesses have bookkeepers and in my case it's ME who does everything. So it's a few more hours of my time.

I don't like the government mandating too many aspects of small business. More and more we are turning into a "nanny state" that watches over your every step and tells you what to do and when. I understand the idea of consumers being protected from unsrupulous buseinesses but come on, people, how much do we need to regulate? Plus, the consumers who need protection are not toddlers, they are grown men and women who have jobs, pay taxes and like SG pointed out they are told the terms and conditions of the GC when they buy it.

OK, if I do honor expired GC, why do I bother with an expiration date at all? Because I WANT people to come in. A lot of clients are procrastinators and if there is no expiration date they will never, ever come in. I gained a lot of regular clients from GC's (that includes expired GC's) and the more traffic the better! I put 12 months on my GC's.

Alright, these are my thoughts on the subject. I think it's a great discussion even though we don't agree on everything.

Beccy, you mentioned "fine print" on your GC's regarding rate increases - how do you word it? Do you mind sharing?