Can You Charge Fees on Gift Certificates?
Federal and state rules on inactivity, dormancy, and service fees for gift cards.
Federal and state rules sharply restrict the fees you can charge on gift certificates. This article covers the categories and the safest defaults for SMBs.
Federal restrictions
Federal rules generally prohibit inactivity, dormancy, or service fees on gift cards within the first year, and require strict disclosure thereafter.
State rules
Many states impose stricter prohibitions, including outright bans on inactivity and dormancy fees. Check your state's consumer protection rules.
Default recommendation
Most SMBs avoid charging any fees on gift certificates. The customer goodwill cost and compliance risk usually outweigh any small fee revenue.
Related legal basics
- Do Gift Certificates Expire? — A practical overview of federal and state rules on gift certificate expiration, written in plain English.
- Gift Certificate Terms and Conditions: What to Include — An eight-clause framework for compliant gift certificate terms.
Frequently asked questions
Can I charge a small replacement fee for a damaged certificate?
This varies by state. Document your policy clearly and consult an attorney.