Gift certificates advice. Leftover amount?

Want to include GC's on website.

[salewit]

I run a scratch-built e-commerce site for items that all vary in price. This holiday season I want to offer gift certificates. I have absolutely no problem with the implementation part, but I'm just wondering what to do with the extra amount a person has left? If someone buys a GC for say $25 and purchases something for $23, is that $2 balance just sitting there to be used up? Is there any method more fair for the consumer in purchasing a gift certificate? Something like a variable rate gift certificate? Anyone out there as a strictly online retailer have any experience with gift certificates?

[Marshall]

A lot of places have at least the following conditions regarding gift certificates:

Not redeemable for cash,
Not valid for more than one year,
Balances may only be applied to purchases and expire after one year from date of product purchase.

Anyway, these are some that I have seen.

Marshall

[salewit]

Hmmm I don't know whether that's legal in the State of California. I know you can't set expiration dates on gift cards in my state, but I wonder whether that applies to intrastate online sales with "e" cards.

[vincevincevince]

When looking at current practice you need to differentiate between promotional gift certificates and gifted gift certificates. Many companies issue gift certificates as a promotion to prompt a much larger spend in return - these certificates almost always require use entirely at once and may even have a minimum purchase value above the value printed on the certificate.

Where gift certificates are sold at-price and only as gifts then it is normally reasonable to apply any remaining amount as credit towards a future purchase. Interestingly, one major UK bookstore offers cash change on the unused portion of a certificate for in-store purchases.

[wayzel]

You could also institute a monthly service fee which begins 12 months after gift card issuance. The purpose of the fee would be to slowly draw down the leftover balance and keep "permanent" liabilities from just sitting on your accounting books forever...which is a problem you don't want to worry about for gift cards someone bought 4 or 7 years ago.