New Requirements for Electronic Gift Cards

During the last legislative session, teachers unions in Oregon focused part of their agenda on gift cards issued by businesses. They fought hard in an attempt to pass legislation that would require all unredeemed gift card funds be taken away from businesses and given to schools. ORA pushed back and, in the end, their efforts were unsuccessful. However, business groups had to agree to protect consumers that paid full price for gift cards as a compromise. Though this battle was lost, the teachers unions have repeatedly raised the issue of unredeemed gift cards for several sessions now and there is no expectation that that will change during future sessions.

The new law, complete with those compromises hinted at above, will be put into effect after January 1st. How it will affect your business depends mostly on the type of gift card you issue at your establishment.

The new law applies solely to electronic gift cards and leaves paper gift certificates alone. The reason for this distinction comes in how each is tracked. Where a paper certificate is hard to keep track of, an electronic gift card generally has an electronic record making it easier to find key information such as recipient and purchase price.

Electronic Gift Cards issued after the first of the year (2008) will now fall into two separate categories: purchased at full value and not purchased at full value. Gift cards purchased at full value cannot have expiration dates or service fees. If the consumer paid full price for the card, they get full price back no matter how long they hold the card.

Gift cards not purchased at full value, i.e. donated or sold below face value, can have an expiration date. However, that date must be clearly marked on the card in one of three forms: printed with the card, written on the card in permanent marker, or on a sticker on the card with the date on it. When it comes to donated cards, the only option allowed is to have the expiration date written on the card.

Of course, if you want to avoid these new regulations altogether, you do have the option of going back to offering paper gift certificates. The laws for those were not changed.