Gift Card liability

2 replies [Last post]
Joined: 2016-02-15

How are other cities dealing with the issue of gift card liability potentially growing to a material amount from an accounting/audit perspective? We are not allowed to have expiry dates on the gift cards.
Joined: 2011-03-04

Gift Cards are technically a retail product that is sold on a cash basis and recognised at the time of sale.
Once they are redeemed they are also treated as cash. So potentially not a liability as such.

Joined: 2016-06-28

We are keeping it on the books as a liability as the gift cards or gift certificates are regulated under the Business Practices and Consumer Protection Act.

The gift certificate cannot have an expiry date unless they were sold for a charitable or promotional purpose or the gift certificate is sold for a very specific good or service. IE if the gift certificate is for the program registration fee for adult yoga class it can have an expiry date. If it’s a gift certificate with cash value – it cannot have an expiry date. But if it’s a $20 gift certificate that can only be spent on the registration for any adult yoga class then it may meet the promotional purposes And can have an expiration date.

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