Do you put expiration dates on your store’s gift certificates or on
customer/store credits? At present we place a one year expiration
date on these items in our store, but occassionally it has caused us
problems.
From the customer’s perspective, their arguement is “Hey, you’ve
already got my money–why do you care when I actually use the gift
certificate?”
Last week we had a customer who spent two hours picking out $200
worth of jewelry, and then pulled out a gift certificate from four
(4!) years ago! When the employee showed the customer that it is
clearly printed on the gift certificate that it expired three years
ago, the customer made such a stink that the employee let her use it.
Any thoughts, suggestions, advice, or opinions? What is your policy
regarding these items?
Call your state’s AG office. In many states, a purchased gift
certificate has no expiration date, by law. You took someone’s money
in exchange for what?
You should check with your state government to check out gift
certificate law.
I went to mass.gov and searched on gift certificates. I was able to
track down the law in my state. If you type in your state.gov you
should be able to do the same thing.
If they don’t use the gift certificate in a year, do you feel good
about taking $200 and giving nothing in return? Yes, gold is twice as
much now! But what have you done for that $200 you received 4 years
ago? Is it just a gift to you? Reputation is so important. I doubt
anyone from that family will be buying anything from you again
because of the stink your employee gave. I don’t think you are being
reasonable. Sometimes we don’t make the profit we would like. But I
doubt you lost anything.
Our policy is simple; if the certificate was “given” to an
organization as a fundraiser, it carries a thirty day expiration. An
employee may extend it one additional month at most, but nothing
beyond.
If a gift certificate is purchased, or given to a customer in an
exchange of merchandise but originally came about through a cash
purchase, it is treated as cash with no expiration.
First of all you should check into your state regulations as many of
them are now setting rules about how long a gift certificate must be
valid for. I know that in Massachusetts the requirement now is much
longer than one year. However, I’m with your customers in this case.
You did get their money. You’ve been able to use it for whatever
profit making purposes you would like during that time. So why
should it ever expire? Why should there be a time limit on it? It is
no more or less inconvenient to you to accept it in a week then in
ten years (actually after a long period of time you’ve been able to
use the money to make a fair amount). Our gift certificates have no
expiration date. If someone wants to come in after twenty years and
use it, it’s fine with me. On credits, we have the same policy,
except that we periodically cull through old ones and send out notes
requiring the customer to notify us if they want to keep it active
(more an issue of keeping addresses updated).
Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
I think it doesn’t mather wheter you put expiry date on the gift
certificates or not. Considering the inflation and higher prices on
gold it is the customers who are losing the money not the business.
Let them have it and avoid confrontation, which usualy make us to
give in. We all know that one upset customer will tell 13 other
people about it.
Whenever you can show me the expiration date on the dollar bills I
gave you in exchange for the gift cert., I’ll accept on expiration on
the cert. itself. Not at all complicated.
In the state of Massachusetts, there are no expiration dates on a
gift certificate. We used to give out a gift certificate if a student
paid for a class and if the class did not run. That came back to bite
us. So now we issue “Tutorial Credit” which DOES have an expiration
date.
If they paid for a gift certificate, you benefited from the money.
Our feeling is that the customer has the right to come back and use
that certificate, just like we used their money.
What you are complaining about is not the $200 gift cert, but the
two hours they spent of your time.
What you can do is be clearer to your customers that if they have a
gift certificate, they should present it first and then they can
select. You can determine how much TIME you want to spend on that
customer.
It happens to us we honor what we say. For us there is nothing worse
than than having a workshop just make the minimum number and then a
person pulls out a certificate. It’s part of business.
A woman just signed up for a workshop with a $435 tutorial credit.
Ouch. However, we will probably sell her a casting machine, so it
works out in the end. Besides, we used her money already to pay a
bill, so she has the right to use her credit. Oh, and while I had her
on the phone, she just signed up for another workshop. She almost
didn’t because she said, “I’m going skiing that weekend”. My reply
was, “hey, this is your business”. There will be plenty of snow on
the ground the next weekend.
She signed up.
The moral of the story, turn every possible bad experience into a
positive one. You might lose on the one sale and gain 2 x on the
next. You never know who will walk into your door.
-k
M E T A L W E R X
School for Jewelry and the Metalarts
50 Guinan St.
Waltham, MA 02451
781 891 3854 www.metalwerx.com
I’d have to agree with your customer. You’ve got the money. You were
selling a gift certificate, not a lottery ticket. Your money didn’t
expire, and factoring in inflation, they did you a favor by waiting
four years to use it.
Although I do put a one-year expiration date on my Gift Certificates,
it is actually illegal in my state to have any expiration date.
Therefore, I use the date as a push to get the customer through the
door in a “timely” manner, but would accept a certificate with any
date on it.
Sandi Graves, Beadin’ Up A Storm
Stormcloud Trading Co (Beadstorm) http://www.beadstorm.com
651-645-0343
I agree with the customer, you have taken money for product at some
date in the future, did the money become bad. From the economic side,
you are not hurt by the process as the increase in material costs
diminishes the purchasing power of the gift card. How in the heck you
work that into your income tax 4 years later, I have no idea. But my
thought is, you took the money, produce the goods, or stop doing gift
cards if you can’t or won’t follow through.
A gift card is a liability on your books that is carried forward
until used.
I think the gift cards that expire or get reduced in value after time
are a total rip off. The card companies actually sell them with the
selling point that a certain % will never be used. I don’t like
expirations on coupons either. If someone comes in with an old
coupon I still honor it. The whole idea was to get them into my
store.
Sometimes we don't make the profit we would like. But I doubt you
lost anything.
An old gift certificate is more profitable, because of the
“opportunity costs” on the money. That is, the store has the use of
the $200 (or whatever) for four years (or whatever) extra before
having to give anything in exchange. Unless there is time invested
in accounting for the money every month or year, there is no down
side to this that I can see.
If someone spends $100 in your store today he gets $100 worth of
jewelry. If he spends that same $100 and buys a certificate, you get
the $100 and the use of the buying power that comes with it; he gets
a piece of paper.
If he waits 5 years to cash it in, he loses buying power because all
governments (except maybe the Swiss) inflate their currency. It’s
really a win for the jeweler since that “$100” doesn’t buy as much as
it did five years earlier.
Although I do put a one-year expiration date on my Gift
Certificates, it is actually illegal in my state to have any
expiration date. Therefore, I use the date as a push to get the
customer through the door in a "timely" manner, but would accept a
certificate with any date on it.
This seems problematic to me. It is not fair to the rule-abiding
customer who comes across it in a drawer and thinks, “Oh, darn, this
$100 gift certificate is no good anymore. What a waste! Oh, shoot”.
You are not only putting on a “rule” you don’t really mean-- you say
it is illegal!
Please just write “please use by:". Or even better, "Free
gift if used by_”
We deal with all gift certificates as liabilities on the books. They
are not counted as income until they are redeemed, as the money is
actually owed to the customer until they exchange the GC for an item.
It’s a bookkeeping pain to keep it in balance, especially on long
term debt, however the certificate doesn’t expire. That would not be
good customer service. The idea is to give as much to your customer
as possible to keep them coming back.
It’s the cost of doing business. A little bit of good will goes a
long way.
An old gift certificate is *more* profitable, because of the
"opportunity costs" on the money. That is, the store has the use of
the $200 (or whatever) for four years (or whatever) extra before
having to give anything in exchange. Unless there is time invested
in accounting for the money every month or year, there is no down
side to this that I can see.
Ah, but some gift certificates are not profitable at all… many
organizations ask for donations,
donations are sometimes given in the form of ‘gift certificates’ and
there is nothing worse than
getting one of those during the slow months when there is little
money coming in. And when these
are redeemed, the clientdoesn’t want to go much over the intial
amount of the certificate.
I wonder why people wait so long to use them? Do they not want a
gift? Are they not interested?
I’ve had gift certificates outstanding for 5 years…Why??? If the
client can’t be bothered to use their dated gift certificate why
should any store owner worry about not honoring it after the date on
the certificate?
I have not been following this thread closely so this may have been
covered, but a gift certificate, even if donated brings traffic into
your store/booth and puts your name in front of many people often
not familiar with your work. The value of this type advertising is
priceless. It states one person felt so strongly about the quality or
originality of your work that they would like a friend or relative
to also have an item crafted by you. A gift, after all, is a
representation of ourselves to that special person. One person
wearing a piece of your jewellery to work, school, church, social
engagements, etc. is the best type of advertisement there is while
you profit in two ways from the sale–the free advertising and the
sale of the item.
Yes, gift certificates can be problematic for small businesses when
presented when inventory is low and there is little cash flow, but
remember, you have already collected the money without giving
anything in return. Donated certificates bring in 10 fold the cost
in advertising that you support the community. Besides, nothing makes
me madder than to be given a gift with an expiration date. This
means I must choose something even if I don’t like the current
selection on someone else’s schedule or risk loosing a gift someone
was kind enough to give me.