Gift Certificate Terms and Conditions: What to Include
An eight-clause framework for compliant gift certificate terms.
A complete set of gift certificate terms covers redemption, expiration, fees, lost certificates, cash redemption, combinability, gratuity, and transferability. This article covers each clause.
Redemption
State explicitly what the certificate can be redeemed for and where (in store, online, both).
Expiration
Comply with federal and state minimums. Most SMBs choose five years or no expiration.
Fees
Inactivity and service fees are tightly restricted. Many SMBs avoid them entirely.
Lost and stolen
Default: not replaced. Exceptions may be granted at your discretion when buyer records confirm non-redemption.
Cash redemption
Several states require cash redemption when remaining balances fall below a small threshold. Build your policy to respect your state's rules.
Combinability
State whether the certificate can be combined with discounts or promotions.
Gratuity
Service businesses should state explicitly that gratuity is not included.
Transferability
Most certificates are transferable by default. If you want to limit transferability, say so.
Related legal basics
- Do Gift Certificates Expire? — A practical overview of federal and state rules on gift certificate expiration, written in plain English.
- Can You Charge Fees on Gift Certificates? — Federal and state rules on inactivity, dormancy, and service fees for gift cards.
Frequently asked questions
Do I need an attorney to draft my terms?
Yes, especially if you operate in multiple states or sell high gift certificate volume. The cost is low relative to the downside of a complaint or regulatory action.