The Guide to Creating and Enforcing Gift Card Policies
Sep 21, 2018
When you create gift cards for your business, it’s also important to create a policy for the use of those gift cards. A solid policy can help prevent disputes, protect your business from loss of revenue and keep your customers coming back. The policy doesn’t need to be complicated. In fact, it’s better if it’s not. An ideal policy is a series of clear rules that are easy to understand and fairly enforced. Here are some tips.
Get Familiar with Gift Card Laws
The Credit Card Accountability Responsibility and Disclosure Act of 2009 (the CARD Act) was created by the federal government to protect consumers by limiting retail and bank gift card policies. The Act applies to retail cards that can only be used at certain stores, as well as bankcards that feature a Visa or MasterCard logo. It says that:
- Gift cards cannot expire before five years from the date of purchase or when money was last loaded on the card.
- Fees for not using the card are prohibited unless the card hasn’t been used for a year. After that year, inactivity fees can be charged no more frequently than once a month.
- Customers can be charged a fee to buy the card or to replace a lost or stolen card.
- The card must clearly disclose the expiration date.
- All fees must be clearly disclosed on the card or its packaging.
States laws also limit businesses’ gift card policies. Those vary by state, so you’ll want to check on your state’s laws. Generally, the laws affect expiration dates and fees, and some states’ laws are more restrictive than the federal laws.
It’s a good idea to be cautious and make sure the policies you create follow all applicable laws. While it’s perfectly fine to look at other businesses’ policies when you are drafting your policy, you’ll want to keep in mind that businesses operating in other states may have to follow slightly different laws than your business. When in doubt, talk with a lawyer.
Tell Customers How They Can Use Their Gift Cards
How customers can use their gift cards will depend on the technology that you use to run your business. For example, will the gift cards be redeemable online, as well as in the store? If customers can use their cards online, you’ll need to tell them how. You should also make sure to state that cards are redeemable for merchandise or services only and not for cash, except as required by law.
Explain the Way for Customers to Check Gift Card Balances
Your existing POS system has a big impact on how you’ll manage gift cards. Put yourself in your customer’s shoes and give them information about the best way to check gift card balances. They may need to bring the card into the store, or you may be able to tell them over the phone or online.
Tell Customers How to Replace Lost or Stolen Gift Cards
When business owners plan promotions, they often focus on how to sell more cards without considering the flipside: What if cards that were already sold become lost or are stolen? You’ll want to put a policy in place, just in case. Your POS system may track balances. Or, lost cards may not be replaceable. Either way, telling customers ahead of time can help prevent disputes down the road.
Enforcing Gift Card Policies
Creating solid gift card policies is only half of the equation—the other half is enforcing them. And the foundation to properly enforcing gift card policies is communication.
Start with clarity. After you draft your gift card policy, have a few people review it. You might consider printing off several copies of the policy (one for each reviewer). Give each reviewer the policy separately. Ask them to highlight anything that’s confusing. If most reviewers highlight the same points, you’ll know that those should be revised to be clearer.
Share the policy with your team. When the policy is finalized, share it with your staff. Make use of whatever official means of communication you’ve established, whether that’s presenting it in a monthly meeting, posting it on the breakroom wall or sending an email. You might have to share the information several times before everyone is clear on the policy. When you talk about ways to promote gift cards, make sure that you also talk about the policy for using those gift cards.
Share the policy with your customers. After your entire team knows the gift card policy, it’s time to roll out the gift cards to customers. When you do so, make sure that you make it easy for customers to access and understand the policy. Include it in card packaging and post it to your website.
Ready to Create & Enforce Your Gift Card Policies?
If you follow these steps, you can rest assured knowing you have a solid policy in place and a team ready to enforce it. Focus on leveraging those gift cards to increase sales and bring in new business!
