The Season for Gift Cards Approaches—Some Reminders about Best Practices

Oct 3, 2023 | News

By David Gould, Staff Editor            

Gift cards will soon be an in-season activity for small and large businesses of all sorts. Golf coaches seem generally bullish: A member-only questionnaire circulated by Proponent Group revealed a notably positive attitude toward this marketing and sales vehicle. There are certainly chronic issues encountered by businesses when they issue gift cards and go to redeem them. For example: consumers forget them, lose them, ask to have them refunded and show up with them long after the accepted three- to six-month window a typical merchant considers normal.

Our questionnaire addressed those matters when it asked, “When someone prepays through purchase of a gift card, which of the following best describes your stated expiration policy?” Exactly half the respondents gave “12 months after purchase” as their nominal expiration time, two percent gave “2 years” and 14 percent gave “six months.” A significant share, 34 percent, said they “do not put an expiration time on any prepaid instruction.” 

All well and good, but people with expired credits aren’t always shy about presenting them. Proponent members deal with that situation as follows: “I put them in my book as usual, with no mention of time limitations or expirations” is the answer 41 percent selected. “I usually oblige them, but I let them know the credit is technically expired,” is the response 46 percent chose. The remaining 13 percent allow themselves the right to refuse to honor expired cards.

To be precise, at the time our survey was in the field, 66 percent of respondents were using traditional paper certificates and 27 percent were using digital gift cards—in fact, a portion were using digital gift vehicles that have no physical plastic card, just a digital record. Those coaches were using Shopify or Square to support their marketing / sales effort on the gift side.

One Proponent member, Orlando-based John Hughes, sent back some useful comments along with his survey responses. In particular he pointed out that instruction “credits” received by a golfer as a result of a coach’s charitable donation can and rightly should be subject to fairly strict usage requirements. “When giving to charities,” says Hughes, “I always have an expiration date to limit my exposure to being forced to serve someone at a peak time. There’s a difference between honoring something that was paid for versus honoring something you provide free of charge.”

Circling back to the internal accounting issue we raised, concerning digital support from Shopify, Square or the like, our point was to see if coaches cared about being able to separate out gift card transactions and track their status, which allows them to be counted on the Liabilities ledger until they are redeemed?” About two-thirds (64 percent) said they weren’t particularly interested in that functionality, while 36 percent said they were.

There are lots of gift card suppliers out there, so do your research if you want to go digital. One of the more popular and low-cost gift card suppliers is Square. Custom gift cards start at $1.50 per card with a minimum purchase of 125 cards. When a customer purchases a gift card, you can load the gift card value from your Square Register and receive the funds right away. There are no additional charges outside of the $1.50 charge and standard processing fee. Another perk of working with Square is you can choose a template or create your own card design that conforms to your brand.