This is one subject that is not taught in nail school in the US (actually very few actual business-related subjects are taught in nail school). But it is important to understand gift certificate laws if you are in this business, especially if you work independently or own a salon. Let make this simple (at least as simple as a law can get).
Since I live in the US and don't have knowledge of other countries laws, I am only speaking of US and state laws here - but please feel free to comment with your local country's laws!
As of August 22, 2010, the United States gift card industry has been regulated by the federal CARD act. This federal law creates a floor for regulation and leaves room for state regulation on redeeming gift cards. State laws that are more protective than the CARD Act are not preempted. So,
applicable state laws that further limit expiration dates or fees or require
additional disclosures continue to be effective. 40 of the 50 states have laws covering gift cards. PLEASE make sure you understand the statutes in your state and do not make the broad assumption that the laws are all the same.
The laws do NOT govern the following (meaning they CAN have expiration dates):
- used solely for telephone services i.e. phone cards
- reloadable and not marketed or labeled as a gift card or gift certificate
- not marketed to the general public
- a loyalty and other promotional award (not paid for with cash - i.e. "buy 4 services get one free" - the free service can have an expiration date earlier than 5 years or the max date set by your state)
- issued in paper form only, redeemable for:
- admission to an event or for the purchase of goods or services in conjunction with the admission, i.e. concert tickets.
- specific good or service, or “experience,” such as a spa treatment, hotel stay, or airline flight, i.e. vouchers.
- a certain percentage off the purchase of a good or service, i.e. coupons.
Expiration
Federal law says that (at a minimum) gift cards sold in the United States cannot expire any earlier than 5 years from date of issue or date of last load. State gift card regulations vary greatly on the issue of expiration dates.
California, Connecticut, Florida, Maine, Minnesota, Montana, New Hampshire, Rhode Island, and Washington all prohibit expiration dates on gift cards.
Of the many states that allow expiration dates, Arizona, Georgia, Nebraska, Nevada, New York, North Carolina, Oregon, South Dakota, Texas, Utah, and Virginia all require that the expiration date be disclosed (but per the federal law cannot be less than 5 years from date of purchase or reload).
Further adding to the complexity regarding expiration dates, many states allow for expiration dates but require that the gift card remain valid for a certain minimum time period
Federal law says that (at a minimum) gift cards sold in the United States cannot expire any earlier than 5 years from date of issue or date of last load. State gift card regulations vary greatly on the issue of expiration dates.
California, Connecticut, Florida, Maine, Minnesota, Montana, New Hampshire, Rhode Island, and Washington all prohibit expiration dates on gift cards.
Of the many states that allow expiration dates, Arizona, Georgia, Nebraska, Nevada, New York, North Carolina, Oregon, South Dakota, Texas, Utah, and Virginia all require that the expiration date be disclosed (but per the federal law cannot be less than 5 years from date of purchase or reload).
Further adding to the complexity regarding expiration dates, many states allow for expiration dates but require that the gift card remain valid for a certain minimum time period
Fees
The federal law generally limits inactivity fee on gift cards except in certain circumstances, such as if there has been no transaction for at least 12 months and many states have regulations that govern the fees that a gift
card issuer can charge.
Connecticut, Florida, Illinois, Kentucky,
Massachusetts, Michigan, Minnesota, Montana, New Hampshire, New Mexico, North
Dakota, Oregon, Rhode Island, and Vermont are examples of states that prohibit a
gift card issuer from charging service fees.
Redeeming for Cash
A few states require
merchants to redeem a customer’s gift card for cash.
In California, a gift card
is redeemable for cash if the cash value on the card is less than $10.61
In
Colorado, a gift card is redeemable for cash if the amount remaining on the
card is $5 or less.
In Maine, Montana, and Washington, a gift card is
redeemable for cash if the amount remaining on the card is less than $5.63
In
Massachusetts, a customer has the option to redeem the remaining balance in
cash (1) if the gift card is non-reloadable and 90 percent of the value has been
redeemed or (2) if the gift card is reloadable and the balance is $5 or less.
In Rhode Island and Vermont, a gift card is redeemable for cash if the
remaining balance is less than $1.65
I hope this gives you a general understanding of gift card laws - I am not a lawyer or a politician so please make sure that if you are offering or accepting gift cards you have researched your state laws (not to mention laws change constantly! Its important to keep up - "not knowing" the law isn't an excuse and you WILL be fined.)
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