Selling gift cards through HoneyBook* is a great way to diversify your revenue streams and allow clients to support your business, even if they don't need to use your services at this exact moment! Anyone who offers this option, though, should familiarize themselves with the regulations surrounding gift cards in order to build their gift card term & conditions and redemption policy, in addition to understanding the potential risks associated with offering gift cards.

* This is a new feature rolling out to members and if your account isn't currently set up to sell gift cards, please be patient.

In this article, we'll review:

Gift card laws & regulations

Though the specifics of gift card regulations vary from state to state, remember that no matter where you are, most laws require that gift cards never expire. This is great for your client, but poses a potential risk to you. When offering gift cards, remember that you'll be accepting money now, likely spending it or putting it towards business expenses in the near-term, then seeing a gift card redeemed at an undetermined point in the future — maybe even a few years down the road, when your cash flow may look different than it does today.

Also, bear in mind that some state laws dictate that if the balance of the gift card is a small amount of money ($5 or $10), you may be obligated to refund the client the remaining balance in cash if requested. 

Check out the regulations for your individual state for more information.

Creating your terms & conditions

In every gift card flow you create in HoneyBook, we'll automatically include a broad, sample terms of service that may or may not be appropriate for your business or your location. 

We are including this text to serve as a reminder to insert your own terms of service that is reviewed by your own legal counsel. Remember that HoneyBook is not a legal service, nor are we able to offer legal advice

Your terms and conditions should address things like gift card expiration, delivery, the potential for refunds, fraud, etc. You can edit the text to suit your business and the specific laws of your location.

Make sure to review the Terms & Conditions Block in each gift card flow you create and share, to make sure that it aligns with your specific state's regulations.

While the vast majority of your gift cards will be purchased in good faith by clients excited to work with you, always keep an eye out for potential fraudsters. In addition to our standard recommendations for preventing fraud, offering gift cards opens another potential avenue to watch.

A few scenarios to watch out for:

  • Remember that, by and large, gift cards cannot be refunded for cash. That being the case, avoid doing things that are similar to giving the member cash, such as using a gift card to pay another vendor. This might be a fraud attempt, where the client has purchased the gift card with a stolen credit card. 

  • Be cautious about delivering services that aren’t in person, or to someone you don’t know. 

  • Be cautious when a gift card is redeemed by a third party you’ve never heard of before. 

  • Be cautious if suspiciously large amounts of your gift cards are being purchased when you haven’t promoted them. It may be fraudsters looking for a victim.

Want to learn more?

Still have questions? Feel free to send us a message by clicking the Question Mark icon on any HoneyBook page. Our team is always happy to help!

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