{"id":45,"date":"2015-05-31T16:20:15","date_gmt":"2015-05-31T20:20:15","guid":{"rendered":"http:\/\/blogs.duanemorris.com\/thelegaldish\/?p=45"},"modified":"2020-08-04T16:46:58","modified_gmt":"2020-08-04T20:46:58","slug":"gift-cards-a-gift-to-restaurants","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/thelegaldish\/2015\/05\/31\/gift-cards-a-gift-to-restaurants\/","title":{"rendered":"Gift Cards \u2013 A Gift to Restaurants?"},"content":{"rendered":"

By Constantine Mittendorf<\/strong><\/em><\/p>\n

\"Gift<\/a><\/p>\n

If you have an unused gift card from your birthday last year, then you\u2019re not alone. Consumer Reports<\/a> surveys have found a quarter of people who receive gift cards don\u2019t use them within a ten month period.<\/p>\n

This can be very profitable for a restaurant that sells gift cards. The restaurant gets the money up front and a large percentage recipients never use the balance on the card. Lots of people either lose the gift card, forget about it, or just never redeem it. In fact, it\u2019s so common that the industry has a term for it \u2013 breakage<\/a>.\u00a0 Gift\u00a0cards\u00a0can be a great deal for a restaurant, but there are some pitfalls.<\/p>\n

Gift card counterfeiting and gift card fraud <\/a>are on the rise, which may create insurance risks.<\/p>\n

Gift cards can also create accounting issues. If the restaurant suspects that a balance on a gift card has been abandoned, then do those funds need to be turned over to the government in accordance with state abandonment laws? If not, when can a restaurant record the unused balance as a profit? Are there any Generally Accepted Accounting Principles <\/a>on gift cards?<\/p>\n

As it turns out, there are laws at the federal and state level that regulate gift cards. For example, California law <\/a>prohibits gift cards from having expiration dates or service fees (subject to some exceptions). Also, California law allows the customer to receive the cash balance on the card if it is under $10.<\/p>\n

Make no mistake \u2013 these laws have been used to sue companies that sell gift cards and discounted gift cards. These cases have cost some companies of millions of dollars. However despite these lawsuits, easily billions of dollars of gift cards still go unspent every year.<\/p>\n

The bottom line is that if you\u2019re thoughtful, a gift card can be a gift to both a restaurant\u2019s customers and its owners.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Constantine Mittendorf If you have an unused gift card from your birthday last year, then you\u2019re not alone. Consumer Reports surveys have found a quarter of people who receive gift cards don\u2019t use them within a ten month period. This can be very profitable for a restaurant that sells gift cards. The restaurant gets … <\/p>\n

Continue reading “Gift Cards \u2013 A Gift to Restaurants?”<\/span><\/a><\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[22,23,12,13,24,21],"ppma_author":[201],"class_list":["post-45","post","type-post","status-publish","format-standard","hentry","category-general","tag-accounting","tag-breakage","tag-california-restaurants","tag-constantine-mittendorf","tag-fraud","tag-gift-cards"],"authors":[{"term_id":201,"user_id":6,"is_guest":0,"slug":"duanemorris3","display_name":"Duane Morris","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/843ff6e7a8fe5fc92109b47a45f34b6cf0ea499e6e788db23456c838b0ae6747?s=96&d=blank&r=g","author_category":"1","last_name":"Sullivan","first_name":"Margaret","job_title":"","user_url":"http:\/\/www.duanemorris.com","description":"Visit the Duane Morris website.<\/a>"}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/thelegaldish\/wp-json\/wp\/v2\/posts\/45","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/thelegaldish\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/thelegaldish\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/thelegaldish\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/thelegaldish\/wp-json\/wp\/v2\/comments?post=45"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/thelegaldish\/wp-json\/wp\/v2\/posts\/45\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/thelegaldish\/wp-json\/wp\/v2\/media?parent=45"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/thelegaldish\/wp-json\/wp\/v2\/categories?post=45"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/thelegaldish\/wp-json\/wp\/v2\/tags?post=45"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/thelegaldish\/wp-json\/wp\/v2\/ppma_author?post=45"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}