Gift Certificates
Archived Q&A and Reviews
Do Gift Certificates Expire?
Jan 2005
Does anyone know the laws about gift certificates expiring? I thought that CA had a law that gift certificates can not expire. I had an uncomfortable experience over the holidays where a small boutique on 4th street would not accept my 100 dollar certificate because it was several years old. The certificate had no expiration date on it. Seems strange that people's money can expire. Thanks in advance........ bh
Here's a link to the legal code. Just print it out, take it to the store and explain to them that they must legally redeem your gift certificate. Good luck! http://www.cardreport.com/laws/california/1749-5.html
Francesca
You are correct. Here is the citation. TITLE 1.4A. GIFT CERTIFICATES California Civil Code Section 1749.5 1749.5. (a) On or after January 1, 1997, it is unlawful for any person or entity to sell a gift certificate to a purchaser containing an expiration date. Any gift certificate sold after that date shall be redeemable in cash for its cash value, or subject to replacement with a new gift certificate at no cost to the purchaser or holder. (b) A gift certificate sold without an expiration date is valid until redeemed or replaced. (c) This section shall not apply to any of the following gift certificates issued on or after January 1, 1998, provided the expiration date appears in capital letters in at least 10-point font on the front of the gift certificate: (1) Gift certificates that are distributed by the issuer to a consumer pursuant to an awards, loyalty, or promotional program without any money or other thing of value being given in exchange for the gift certificate by the consumer. (2) Gift certificates that are sold below face value at a volume discount to employers or to nonprofit and charitable organizations for fundraising purposes if the expiration date on those gift certificates is not more than 30 days after the date of sale. (3) Gift certificates that are issued for a food product. Laurel
No, in California, a store cannot sell a gift certificate with an expiration date subject to certain limited exceptions. See the following: CALIFORNIA CODES CIVIL CODE SECTION 1749.5-1749.51 1749.5. (a) It is unlawful for any person or entity to sell a gift certificate to a purchaser that contains any of the following: (1) An expiration date. (2) A service fee, including, but not limited to, a service fee for dormancy, except as provided in subdivision (e). (b) Any gift certificate sold after January 1, 1997, is redeemable in cash for its cash value, or subject to replacement with a new gift certificate at no cost to the purchaser or holder. (c) A gift certificate sold without an expiration date is valid until redeemed or replaced. (d) This section does not apply to any of the following gift certificates issued on or after January 1, 1998, provided the expiration date appears in capital letters in at least 10-point font on the front of the gift certificate: (1) Gift certificates that are distributed by the issuer ! to a consumer pursuant to an awards, loyalty, or promotional program without any money or other thing of value being given in exchange for the gift certificate by the consumer. (2) Gift certificates that are sold below face value at a volume discount to employers or to nonprofit and charitable organizations for fundraising purposes if the expiration date on those gift certificates is not more than 30 days after the date of sale. (3) Gift certificates that are issued for a food product. (e) Paragraph (2) of subdivision (a) does not apply to a dormancy fee on a gift card that meets all of the following criteria: (1) The remaining value of the gift card is five dollars ($5) or less each time the fee is assessed. (2) The fee does not exceed one dollar ($1) per month. (3) There has been no activity on the gift card for 24 consecutive months, including, but not limited to, purchases, the adding of value, or balance inquiries. (4) The holder may reload or add value to the gift card. (5) A statement is printed on the gift card in at least 10- point font stating the amount of the fee, how often the fee will occur, that the fee is triggered by inactivity of the gift card, and at what point the fee will be charged. The statement may appear on the front or back of the gift card, but shall appear in a location where it is visible to any purchaser prior to the purchase thereof. (f) An issuer of gift certificates may accept funds from one or more contributors toward the purchase of a gift certificate intended to be a gift for a recipient, provided that each contributor is provided with a full refund of the amount that he or she paid toward the purchase of the gift certificate upon the occurrence of all of the following: (1) The funds are contributed for the purpose of being redeemed by the recipient by purchasing a gift certificate. (2) The time in which the recipient may redeem the funds by purchasing a gift certificate is clearly disclosed in writing to the contributors and the recipient. (3) The recipient does not redeem the funds within the time described in paragraph (2). (g) The changes made to this section by the act adding this subdivision shall apply only to gift certificates issued on or after January 1, 2004. 1749.51. Any waiver of the provisions of this title is contrary to public policy, and is void and unenforceable. anon atty
My understanding is that if someone paid money for the gift certificate, then it can't expire. But if it was a freebie from the store (like $10 off your first purchase), and actual money was not spent on it, then it can expire. Sue
You are correct -- gift certificates do not expire under California law. There's a good web page here with more info: http://www.dca.ca.gov/legal/s-11.htm Lori
Check out the web site of California Department of Consumer Affairs: http://www.dca.ca.gov/press_releases/20001214.htm. They say: ''The California Department of Consumer Affairs has holiday hints for the increasing number of shoppers buying gift certificates. More than 40 percent of consumers expect to give either gift certificates or money, according to the National Retail Federation. Before you buy from a retailer or e-tailer, find out four fast facts. Is It Timeless? Most gift certificates cannot contain an expiration date, and are valid until redeemed or replaced. (The only exceptions are certificates issued prior to January 1, 1997; distributed under various awards programs; sold to employers or to nonprofit and charitable organization for fundraising purposes; and for food products.) Only Online? Consumer Reports OnLine advises last-minute shoppers to consider gift certificates because delivery is fast and cost-effective. However, some e-tailers require customers with gift certificates purchased online to be used only for online orders. Before e-purchasing anything, visit the Department's ''Click With Caution'' campaign at www.dca.ca.gov. Convenient to Convert? Find out if the merchant's redemption policy is favorable for the intended recipient. Can the certificate be redeemed for merchandise only, cash only, or a combination of merchandise and cash? Or is a new certificate issued for any balance remaining? A Voyage of No Return? Review the company's return policy. By law, stores do not have to offer refunds or exchanges. Instead, they may inform consumers that all sales are final.'' Katherine
No. At least not in California. According to KRON's site ''....When Dennis called Contact 4 volunteer Forrest, he confirmed that in California, expiration dates are illegal on most gift cards or gift certificates issued after January 1997 (California Civil Code 1749.5 ). There are a few exceptions. For promotional give-aways, gift cards are awarded through loyalty programs or those sold at a discount. Gift certificates for food items are also exempt. However, restaurant gift cards and certificates can NOT expire. California is also leading the way in regards to surcharges on gift cards. ''Effective January 1, 2004, a retailer may not sell a gift card that contains a service fee, including a monthly service fee,'' says Daveed Schwartz, attorney with San Francisco-based law firm Pillsbury Winthrop , which helps many of its retail clients remain in compliance with California's gift card laws. Remember though, these are state laws not federal ones. dhttp://www.kron.com/global/story.asp?s=1632958=Printable
Jessica
Sales tax on gift certificates?
Dec 2002
I just purchased a gift certificate from a catalog that has stores in California, so for their clothing, etc. there would be sales tax. I was charged sales tax on the gift certificate, I called to ask about this and the person whom I spoke with as well as her manager said yes, there is sales tax on gift certificates. This sounds ridiculous to me, then we are getting double taxed, I thought a gift certificate was like buying store credit (the certificate does not include the amount of tax which I payed.) Does anyone know who is right here?; and if I am right is there some law, code, etc, that I can refer to when calling them again since they seem certain that it's o.k. to tax a gift cert. Thanks for any help. Chris
This sounds ridiculous to me too. Sales tax is not charged on the gift certificate amount, but on the merchandise when the gift certificate is redeemed. The CA State Board of Equalization's web site says the following about this:
''Note--gift certificate: Although you do not include the sale of a gift certificate under your total sales, you do report the sale that occurs when you accept the certificate for a sale of merchandise or property. The sale must be reported for the reporting period in which the certificate was redeemed.''
These instructions for someone filing a return are consistent with that approach. I would insist on getting your money back! Claire
I have bought I-don't-know-how-many gift certificates, from all sorts of California businesses, from Target to Body Time to Sur La Table to Nordstrom, and have NEVER paid sales tax on them. When the recipient uses the certificate, they will pay sales tax on their purchase. Otherwise, as you point out, it amounts to double taxation. I'd like to know what business it was that charged you, since I don't want to patronize it if it persists in this practice and since it needs to be wised up. Wendy
Regarding sales tax on gift certificates. I am not sure where I saw the question but did not see any answer given. Per CA law, sales tax is not charged on the value of a gift certificate (it is after all an intangible item and sales tax is applied when acquiring a tangible item). Having said that, I do not know what other states do; it depends on where the gift certificate was purchased. I would talk to a manager. I had a similar situation occur because the website did not know how to stop the sales tax from automatically being charged during check out. eileen