Expired restaurant gift certificates

I have two old gift certificates, they say expired in 2002 and 2003. I seem to recall that it is not actually legal for them to expire, but I am not sure if that is true or if it applied at that time. Does anyone know? Thanks. I am too embarassed to call the restaurants and ask!

-Pam

Hi,

I have no idea on the legality. I have been refused to use expired gift certificates and in other places accepted.

There is a lot of profit in unused gift certificates for an entity. I always wondered if unexpired gift certificates were carried on their books from year to year as potential income (like magazine subscriptions) and eventually are retired to be considered taxable income. It may be at that point it does become truly void, because they paid taxes on $100 instead of the net profit of $25 they might have had if the coupon was used. I am being purely speculative, though I will bet there is an accounting influence to all of this.

Regards,

Cathy2 wrote:Hi,

I have no idea on the legality. I have been refused to use expired gift certificates and in other places accepted.

There is a lot of profit in unused gift certificates for an entity. I always wondered if unexpired gift certificates were carried on their books from year to year as potential income (like magazine subscriptions) and eventually are retired to be considered taxable income. It may be at that point it does become truly void, because they paid taxes on $100 instead of the net profit of $25 they might have had if the coupon was used. I am being purely speculative, though I will bet there is an accounting influence to all of this.

Regards,

FWIW I work for an accounting firm, and was just having a conversation with one of the partners yesterday about expired gift certificates (not restaurant ones but just general ones) and she thought it was crap you could put an expiration date on them.

Consumer Action Website FAQ on Gift Certificates

According to this website, the law changed in August 2004. Long story short, gift certificates can expire in Illinois. (Not so, as it happens, elsewhere. But that's a very complicated, messy, state-law-specific area that I don't have the patience to type up. Googling it will very quickly produce a plethora of sites happy to tell you everything you wanted to know. And more.)

P.S. You may also want to visit this page to see about getting your money back.

Hi,

I thought it was interesting that some states have the funds from expired gift certificates fall under a state's unclaimed property laws. Those funds go to the state treasury, rather than taxed as income as I supposed, thus the consumer is really out of luck as well as any potential income for the restaurant, too.

I'm not sure if that applies to Illinois, I am simply commenting on some of the information in the links. There are more wrinkles to this situation than I ever considered.

Regards,

Cathy2 wrote:Hi,

I thought it was interesting that some states have the funds from expired gift certificates fall under a state's unclaimed property laws. Those funds go to the state treasury, rather than taxed as income as I supposed, thus the consumer is really out of luck as well as any potential income for the restaurant, too.

I'm not sure if that applies to Illinois, I am simply commenting on some of the information in the links. There are more wrinkles to this situation than I ever considered.

Regards,

It's not really income, it's a liability on the books of the store. Debit cash, credit gift card liability. Sale is made and gift card presented as payment, debit gift card liability, credit revenue.