• Do Gift Certificates Expire?
• Sales tax on gift certificates?
• More advice about Gifts & Gift-giving

Do Gift Certificates Expire?

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

  (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.

  (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.

''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.''

Sales tax on gift certificates?

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

''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