A Gift Certificate Conundrum

Josie Leavitt - March 28, 2012

We issue gift certificates, like almost every other store in the country. Yesterday there was a customer exchange that made me think very hard about my policies and how flexible (or not) I should be.
A customer came in while I was at lunch and explained to my very patient staffer that in 2005 she was given a notecard from her students saying there was a gift certificate waiting for her at the Flying Pig. She never came in to claim the certificate. This was back before we switched to the ABA-sponsored gift card programs; the certificate was paper and we held it in the desk drawer for her for a full year and a half until we moved the store. Back then these certificates expired in a year, which was clearly written on the certificate. We always allowed them to be redeemed up to three years later. This three-year time span is now the law.
Now, seven years later, the teacher comes in with the original card, but no actual paper certificate, which we show as having been written and possibly picked up.
My initial inclination was to tell the customer that the gift certificate had long expired and could not be used. But I posted this situation on the New England Children’s Bookselling Advisory listserv and was frankly stunned by the number of folks who said they’d accept the gift certificate, even though there was no actual certificate and it was seven years old.
I was so torn about this. In a perfect world, I’d happily accept on faith that we had held a gift certificate for a teacher seven years ago and just let her use it. Perhaps it’s the sudden dip back into winter this week, but I’m tired of being taken for granted. It has cost me money to have my accountant keep carrying this unused gift certificate on my books. I know we received money for this, I’m not disputing that, but there are rules for things.
Things expire and are no longer good. If I can accept that when I clean out my car and find an expired gift certificate for a restaurant, why can’t my customers? Why should I bend the rules, the very clear rules, for one customer? But then I hear the voice of customer service, that says, just let her use it and move on.
I was reminded anew of that statistic that retailers hear: when a person has a good experience they tell three people, when they’ve had a bad experience, they tell twelve. This weighed heavily on me as I tried to make a decision that felt fair to both of us. Elizabeth and I decided in the end to issued the customer a gift certificate for half the original amount. This seems really fair to me. If that mythical restaurant honored any part of my expired gift certificate I’d be thrilled.
The customer didn’t thank me, nor did she acknowledge that we were doing her a favor and honestly, going above and beyond. She wanted to have us hold the gift card for her behind the register. I popped it in the mail instead.

26 thoughts on “A Gift Certificate Conundrum

  1. Paul Riddell

    I sympathize. My wife is a jeweler, and the owner of her jewelry store instituted a layaway plan about four years ago, when the real estate bust was really kicking in and money was tight. The rules were basic: put down half and the item in question was kept in reserve, with the remaining balance to be paid off within six months. After six months, and this was stated repeatedly in both written and verbal form, if the balance wasn’t paid off, the item was returned to the display case and the money forfeited. My wife and the owner even worked with customers who were short, being willing to take partial payments toward the items and reminding the layaway customers know that they were running out of time. The whole time, the idea was that they wanted to make everyone happy, but an item kept on reserve was one that couldn’t be sold to another customer ready to pay right then.
    Now, she’s seeing a line of those layaway customers from 2008 and 2009. They didn’t so much as come in to check on their status in the last three years, repeated phone calls were ignored, and the items were long-sold to actual paying customers. These ones, though, come rolling in because “I’ve decided that I don’t want to buy that any more” and insist upon getting their layaway deposits back. Then, when they’re told that the money was forfeited after six months, scream “THAT’S AGAINST THE LAW!” and start crying about calling the Better Business Bureau. (Interestingly, the BBB has yet to call the store, mostly because most of these geniuses admit that they knew the rules and figured that they’d just bully the staff into giving them a full refund.) This doesn’t stop them from getting on Yelp and Angie’s List, complaining about how they were “ripped off.”
    And on a related subject, my wife can sympathize with a lot of used bookstore owners as well. As with most jewelry stores these days, hers buys gold, and she has a lot of sympathy for bookstore buyers who get people who want an accurate offer for a collection, sight unseen and over the phone. There’s nothing quite like explaining, six different ways, that she can’t give an estimate on the value of a ring or necklace without actually seeing it, and that she can’t “just give a ballpark estimate” because the customer then holds that as gospel.

  2. Kathleen

    I don’t think I would have accepted it. If she hasn’t come into your store in the last seven years then really, is she a customer? I would however use it as a reminder to put a little blurb about gift certificates in your ad or newsletter. They’re great for Easter gift baskets and are good for three years or until the balance is used! No annoying monthly fees.

    1. Sarah

      I agree – she hasn’t come in in seven years, AND she didn’t seem the least bit grateful. Unfortunately, she sounds like a “taker”. Whether she will spread negativity is anyone’s guess – perhaps anyone who listens to her knows what she’s like. And maybe no one listens to her . . .

  3. Eileen

    As a business owner, I understand the difficulties of this decision. As a consumer having just read this, I wouldn’t shop at your store. You sound like a greedy, whiny person who isn’t honoring your gift certificates. You have a policy. Did the card clearly state it was only good for one year? If not – you’re fault and you should honor the whole amount. Also I don’t know how much it was for but you just took someone’s money and provided NOTHING in return for it. Why do you deserve free money?
    It is tough being a small business owner – very tough. You need policies for things you haven’t even thought of. However, your customers (and she is a customer even if she has only come in once) don’t know your policies unless they are clearly stated. If you have a policy and it is on the card – you can say I’m sorry this has expired and we can no longer honor it. If it isn’t – then you have to honor it.
    You got paid now provide the service.

    1. Elizabeth Bluemle

      Thanks for your comment. I must say that “greedy” is far, far down the list of adjectives that would ever describe Josie or the rest of our staff, or our store. We give away tens of thousands of dollars in book and gift card and even cash donations annually. That said, the problem of taking money seven years ago that wasn’t used is an issue, for sure. There are fees associated with accounting for these unused funds, but those don’t add up even over seven years to the amount of that particular gift card. Back when we issued the certificate, it expired one year from the date of issuance. We always honored those for at least three years, and often longer. Seven years is a long time, especially since the paper trail is gone and we only have the customer’s word that the paper certificate was not used. (She didn’t have the actual certificate; just a card from the class saying it would be waiting at the store for her.) We moved from that store location five years ago. This is an unusual set of events, complicated by changed laws and policies (now our plastic gift cards do not expire). We have created what we feel is a fair compromise.

    2. LisaLee

      Wow, really???? You are the type of customer all retailers rightfully dread, the one who can’t be bothered to take five seconds to either read or ask about return policies or gift card limits or whatever! You honestly, honestly expect a store to hold a gift card for seven years when the person never comes in???? And then expect them to honor it, especially when the orginal clearly stated the time frame????? And you are definitely foolish to claim that the bookseller ‘took’ the money and provided nothing in return. How about you read the article again before making such a statement! People like you and this ‘I cant’ be bothered to get a simple gift card/certificate for seven years’ are why retailers really dread these cards. I know plenty of stores who wouldn’t have been as nice as the bookseller was. If you want to be hyper-critical and make these kinds of statements that’s your right but I do pity any store that has you as a customer with the attitude that you have.

    3. Josie Leavitt

      I have to chime in here. Honestly, I am not legally obligated to accept the card at all, as it well beyond it’s expiration date. To call me greedy is frankly, absurd and unnecessary.
      If this person went to a chain or big box store without an actual paper gift certificate, or even one that was seven years old, there’s no way it would be honored. I am not greedy for actually making someone accountable for losing something. And the fact that I’m splitting the difference and honoring half of a clearly expired, and possibly redeemed, gift certificate makes me someone who is trying to make the best of bad situation. I once lost a $125 gift card from Home Depot, the week I got it, and I had all the info about who bought it and when, and they wouldn’t help me without the actual card. I was offered nothing. Would you call them greedy, or just adhering to their policy?
      This situation is unique in that she never came to pick up the card. Had she done that, she would have clearly seen the expiration is was one year. (which was the law back then).
      The sad fact is that fewer than 50% of all gift certificates get redeemed. It’s not my fault that the customer did nothing for seven years. Actions have consequences, and just because someone is a customer doesn’t mean the rules can bent for her. By offering her a $55 gift certificate we felt were doing the best for all parties. That you see compromise on something that is long past its useful life as greedy on my part says more about you than me.

    4. Debbie

      You know….this is one of the big problems with our world today. Nobody wants to take responsibility for their actions…..or lack of action, in this case. It’s always someone else’s fault and there are people who always want somebody else to pay, take the loss, etc. It’s a very sad part of our society! I think the Flying Pig went above and beyond the call of duty to honor a gift certificate that was SEVEN years old. Especially since the possibility exists that it might have already been used. Shame on customers who take advantage of stores like this!

  4. Debra

    Laws differ according to state. I believe in NH gift certificates under $100 never expire. I understand your point, but I remember before this law went into effect finding a lost gift certificate my husband had given me that had expired. We had shopped at this (local undependent) shop several times and assumed they would honor it, but when I went in I was stunned they told me no. We never went back. So it’s a tough call.

    1. Josie Leavitt

      But why can’t a store adhere to a policy without people vowing to never go back? Would you expect a larger store to honor it? Probably not. And we didn’t not honor it, we split the difference which seemed like an extremely reasonable solution.

    2. Peter Glassman, Books of Wonder

      The big difference between your situation, Debra, and the one Josie was dealing with is that you HAD the gift certificate. We not only do gift certificates, but give out “Books of Wonder Dollars” based on the number of books people buy (not the dollar amount — I want to promote reading as much as sales). The “BOW Dollars” are good for for 4 months. Our hope is that people who come for Holiday Season will be inspired to come back once or twice a year more. Of course, people are always trying to use them after they’ve expired and our standard practice is to offer them half their face value. Unlike Josie’s customers, our customers seem to always be especially thankful and never give us a hard time about it. While I agree with Josie that it might be nice if people treated booksellers like other retailers (I can’t imagine parents allowing their children to take off their shoes and socks and run around or allow siblings to chase each other up and down the aisles while they talk on their cellphones at Starbucks or Macys like they do in our store), the reality is that people seem to expect far more from bookstores. I think part of it is that they confuse us with public libraries. I remember when we were on the corner of 7th Ave and 18th St. — a busy intersection in NYC — watching people point to our store from across the street and then come into the store… only to discover they just wanted directions. They would literally walk past 4 or 5 other stores to come to us for the information. Occasionally, if the person seemed very friendly and chatty, I’d ask them why they came to us and not any of the other stores on the block for help. And they’d always reply something along the lines of, “Well, I think of bookstores as places to get help or information.” While flattering, that can get very wearying to my staff — and ties them up when they could be helping customers. But that’s just one of many unusual costs we incur in running a bookstore.

  5. Sue Kelso

    As a former bookstore employee of 20+ years and now a dabbler in retail, I would not have taken it. Just like the customers that I have now who left their coupon at home and want me to still honor it. The answer is No.

  6. Emily

    I think your compromise of splitting the difference was perfect. You can’t give the full amount because a.) the gift card would have expired already even if she did pick it up, and b.) there’s no proof that it hasn’t been used already. However, you want every person who walks through the door to know that you appreciate their business. Its too bad that consumers sometimes feel entitled to have the rules bent for them like this, but luckily they tend to be few and far between. Hopefully this particular customer realizes that you did them a favor and will come back to support your store.

  7. Diana H

    It is my firm belief that every “customer” should work retail at least once in their life before saying gift certificate policies are unfair.
    Never having worked retail before I thought the same thing, yup, I’ll admit it. Now that I’ve worked in a bookstore for seven years, and finally understand how the gift certificate system actually works, that they are actually like an account, it makes more sense. There are fees to keep these accounts open, which is why there are expiration dates. Essentially to make sure the retailer doesn’t pay away the amount that was just paid to them, and therefore nullifying the certificate before it’s spent by the recipient.
    And really how well appreciated was that gift, that you couldn’t bother to spend it within its given time period? It’s like buying bread before you go on vacation and being made that it expired while you were out. 😉

  8. Riley

    Josie, I’m going to have to agree with your customer who wasn’t “grateful” about not getting the full value of her gift certificate. While it’s easily argued that she should have picked it up sooner and that you shouldn’t have to “bend the rules” for customers who don’t redeem their gift certificates on time, the fact of the matter is that her students chipped in to buy her a present in 2005. For whatever reason, she never picked it up (maybe it was a retirement gift and she lost the card in a box after moving out of her classroom and only just found it, who knows/cares), but when she finally found it again and brought in the note from her students she did so with the assumption that the store would honor the full amount of the money that her students gave her instead of just keeping her students’ money for themselves as profit. I’m sorry about not being sympathetic about all your accounting fees over the years, etc., (though I know they come nowhere close to $110 or even $55), but the fact of the matter is that for any business the best gift certificate is the one that is never redeemed (aka “free profit without having to give anything back in exchange”). In 2006, consumers spent $80 billion on gift cards and companies (including yours) made $40 billion from unused/lost/expired gift cards. I have no idea what your figures are, but assuming that you sold $10,000 in gift cards and “only” had to “give away” $5000 worth of books when people redeemed them (and likely, many of those people bought more from your store in that transaction than the value of their gift certificate), that’s still a $5000 profit from unredeemed gift certificates. Not giving her the full value of the gift certificate her students bought her, with the understanding that she’d be able to buy $110 worth of books, is the same as taking that $110 from the schoolchildren (since they’re they ones who gave you the money in exchange for the gift certificate) and giving them nothing back in exchange. So, sorry, but I really don’t think you should be patting yourself on the back for “going above and beyond” and “only” taking $55 from them. Coupled with all the profit you make from unredeemed gift certificates, your “compromise” is greedy, whether you want to believe it or not.

    1. Josie Leavitt

      Okay, me again, defending myself, for the last time.
      1. Let’s remember that the teacher in question didn’t actually have a gift certificate, just a note card, from 1/15/2005, saying there a gift certificate being held for her. We haven’t been in that location for more than five years and didn’t move the desk drawer with us.
      2. Our records indicate there was a gift certificate issued in January of 2005. That is where the paper trail ends.
      3. Your assumption that I made 50% profit on unredeemed gift cards is based on a national average. You actually know nothing about my store or our redemption rate. I just ran a report for the lifetime of my store, going on sixteen years now, and our gift certificate redemption rate is a stunning 94.20%, which far exceeds the national average. So, I’m not really making money hand over fist as you imply.
      4. Let’s be honest, the kids didn’t actually spend the money on the gift certificate, their parents did.
      5. The gift certificate, if she actually had it, had long expired. And if this lovely gift from her students meant so much to her why did she wait 7 years to redeem it. The kids who gave it her have already graduated college.
      6. I make it a point every June to ask parents which teachers they are getting gift certificates for. I try to keep a mental note of which ones never come in. I then steer the parents towards a book or journal I think the teacher will enjoy. I do this because I don’t want to see people waste their money.
      7. The bottom line here is: if you get a gift card to anywhere, keep safe and then use it.
      8. I have three restaurant gift certificates that I have vowed to use this spring before I lose them or put them through the wash. And you know what? If I had lost one or found it seven years later, there’s no way I’d expect the restaurant to honor any part of it.
      9. Let’s all have a nice weekend!

  9. Ellen Mager

    Wow Josie, talk about opening an unexpected can of worms! In Pa there is no expiration date on an item that was bought by someone else so it’s different here. But the MAIN point to me is that she did not have the certificate, just the note! That, to me, cancels all the rules because in all this time, maybe she really did use the certificate!. There was no certificate = no reason to give the credit. I think you were more than fair and gracious in this situation to have allowed her any credit at all. You more than bent over backwards so don’t worry about these nasty responses that sailed right over the most important information – there was no G.C. Now with booklog, the gift certificates are automatically logged and I could go back and check the number from about 4 years ago and I would have. 7 years = no record so anything you gave her in my book was icing.

  10. Gabriella Wheeler

    I worked retail for many years and while book buyers may be a different breed (I hope so) my faith in my fellow man was NOT improved by the experience. There is a responsibility on the part of the person who gets the deal. If something went wrong, a simple phonecall might have sufficed. Telling the store that she was unable to get there (someone could call for her) and giving them the phone number so they could call if they discovered they still hadn’t closed out that certificate would have simplified the entire thing. Waiting 7 years is a bit much by any standard. Most checks can’t be cashed after a certain amount of time. At LEAST the customer should have been a bit sheepish, in my opinion. We all have a tendency to believe we can dump responsibilities if we get busy or sick or whatever, but really, it’s the person with the gift certificate’s responsibility to figure out how to get their “freebie” in a reasonable amount of time.

  11. Rebecca

    You were more than fair with this woman. Not only could the gift certificate have already been used, it could never have existed! There’s no proof that anyone bought it, just a card saying so? How do you know she didn’t just write the card herself and bring it in to see what she could get? She wouldn’t have gotten anything from me and anyone who says you’re anything less than extremely GENEROUS is the greedy one.

  12. Mary Clark

    As a former bookseller and current school librarian, I just want to chime in and tell you how many times I received gift cards from students, only to find they’d never been activated! Who’s to say this student didn’t write a lovely note, and not include the gift certificate? I even had a parent come in to apologize, because her son wanted to give me a gift, and the mom didn’t want to explain that she couldn’t afford it. So he gave me a card with a $25 gift card from a coffee chain, and she came in and replaced it with the apology and a plate of cookies.
    I would never expect that gift “note” to be honored.

  13. Andie

    I thought you did the right (and by the way NOT greedy) thing by giving her half. I just hope you sent that gift card by certified mail because if her previous actions are any indication she is likely to say that she never received it and expects you to give her another.

  14. Allan Hoving

    You can’t be half-nice. You were under no obligation to honor, but if you wanted to be gracious, go all the way.

  15. Steven

    It seems to me that you are missing the point of the gift card. The point is to get a person into your store with the mindset of spending money. This is a person who will buy something that you sell. Whether or not the first purchase makes a profit, the customer has a long term value. That is why you spend money on advertising. That is why you spend money on coupons. That is why stores might offer a door prize or a gift. Once they are in the store you have the opportunity to make them into an ongoing customer. It is not easy to create a loyal customer and the value over time is the reason for the short term investment.
    I do not know how much the card was for, but your cost was your purchase price for whatever was purchased. My reaction would to have immediately given a wide smile and enthusiastically welcomed her into the store. I would have expressed disappointment that she had waited so long to become a customer, but encouraged her, now that she had found the store, to come back frequently.


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