From Here To Eternity – Minnesota Joins States Which Limit Gift Certificate Expiration Dates
By: RICHARD J. WEGENER
May 2007
With the arrival of “graduation” season, consumers are again turning to gift certificates and gift cards to reward their favorite graduate for successfully navigating the academic battleground. Afraid of making the wrong gift choice – and desiring to do something more than merely include cash or a check in a graduation card – family and friends have made gift certificates an increasingly popular gift choice. At the same time, administering this form of gift giving has become difficult for national gift certificate/card issuers as the number of state legal restrictions proliferate.
The Move To Restrict Expiration Dates
While most states have no specific requirements for issuing gift certificates, several states have rules regarding the use of expiration dates, and the list continues to grow. From California, on the left, to New Hampshire, on the right, to Minnesota in the middle, the trend is obvious – a national gift certificate with a “one size fits all” expiration date is on its way to becoming an exhibit in the marketing equivalent of the Smithsonian Museum.
Minnesota Is The Latest To Limit Expiration Dates
Minnesota is the latest state to believe it necessary to save gift certificate purchasers from forfeiting their investment because of nonuse before a scheduled expiration date; a new law bans expiration date restrictions on certificates issued August 1, 2007 and thereafter.
Some state laws, such as Arkansas, prohibit gift certificates or store gift cards with an expiration date less than a given number of years, such as two years. In contrast, expiration dates of any duration will be unlawful in Minnesota. Minnesota does recognize what has become a standard exemption – gift certificates distributed as part of a loyalty, promotional, award, incentive, rebate, or other similar purpose without payment by the consumer.
Why This Is Important
Consumers enjoy the convenience of gift certificates, and recipients appreciate the flexibility and freedom to use a certificate to pay for a gift they actually choose. While most states have no specific requirements for issuing gift certificates, a growing number have rules regarding the use of expiration dates and more, including consumer disclosures, record keeping, fees changed, and escheat law implications. Gift certificates are now subject to a complex regulatory landscape. It is essential that marketers with gift certificate programs be aware of the various different state laws, old and new, that impact their gift certificate programs.