Gift card policy for a café or restaurant: a fill-in template, the federal five-year rule and a monthly check

December is when gift cards sell. A card is easy money on the day, but until someone spends it, it's money you owe. And the questions come later: Does this expire? Can I get the last few dollars in cash? If the answer depends on who's at the register, you have a policy problem.

Below: the federal rule, a policy to fill in, a cashier procedure and a monthly check of how much you still owe.

General information, not legal advice. Many states have their own gift card laws on expiration dates, fees, cash back for small balances and unclaimed property. Check your state's rules, and ask your accountant how to book unredeemed cards.

What the federal rule says

The federal rule is Regulation E, 12 CFR 1005.20. A card you sell that's only good at your business (or your group of locations) is a store gift card: issued "in a specified amount, whether or not that amount may be increased or reloaded, in exchange for payment" and "Redeemable upon presentation at a single merchant or an affiliated group of merchants for goods or services" (§1005.20(a)(2)).

Three parts matter most for a café.

Expiration: five years at least. You may only sell a card with an expiration date if "The expiration date for the underlying funds is at least the later of" five years after the card was issued or last loaded, or the date on the card (§1005.20(e)(2)). The card must also show "The expiration date for the underlying funds or, if the underlying funds do not expire, that fact" (§1005.20(e)(3)(i)).

Fees: rarely worth it. A dormancy, inactivity or service fee is only allowed if "There has been no activity with respect to the certificate or card, in the one-year period ending on the date on which the fee is imposed" (§1005.20(d)(1)), the fee is printed on the card, and "Not more than one dormancy, inactivity, or service fee is imposed in any given calendar month" (§1005.20(d)(3)).

Disclosures go on the card. "A disclosure made in an accompanying terms and conditions document, on packaging surrounding a certificate or card, or on a sticker or other label affixed to the certificate or card does not constitute a disclosure on the certificate or card" (§1005.20(c)(4)). Ask your card printer what's on the back.

The simplest policy is no expiration and no fees. Then there's nothing to disclose but that fact, and nothing to argue about at the counter. State law may require it anyway.

Two cards that work differently

• Bonus and promotional cards. Think "buy a $50 card, get a $10 bonus card" (hypothetical amounts). The federal rule excludes a "loyalty, award, or promotional gift card" from the five-year and fee rules (§1005.20(b)(3)), but only if it carries certain disclosures, including "A statement indicating that the card, code, or other device is issued for loyalty, award, or promotional purposes, which must be included on the front of the card" and "The expiration date for the underlying funds, which must be included on the front" (§1005.20(a)(4)(iii)(A)–(B)). Use a different card design for bonus cards, print "Promotional" and the date on the front, and never sell one.
• Paper certificates. A certificate "Issued in paper form only" is outside the federal definitions (§1005.20(b)(5)). That's the donated certificate for a school raffle. State law may still apply, so give them the same terms as your cards unless you've checked.

The policy (fill it in)

Post a short version at the register and keep the full one in your employee handbook.

At the register

Selling a card

1. Ring the card as its own item, take payment, then activate it in the POS. Never activate first.
2. Hand over the receipt and point to the balance line.
3. A bonus card goes out only with the qualifying purchase on the same check, and gets its own button so it never rings as a sale.

Redeeming a card

1. Scan or key the card, read the balance to the guest, and apply it.
2. If the check is more than the balance, take the rest as another payment. If it's less, the rest stays on the card.
3. If a card won't scan, don't key the number in from a photo the guest shows you; call the manager.

Never:

• read a card number or balance out over the phone to someone who can't show the card;
• take gift cards in payment for other gift cards;
• sell gift cards for a "manager" who calls and asks for numbers. Hang up and call your manager on their known number.

Teach it in the same session as the cash and POS training in our server and cashier hiring guide.

The donation and comp log

Every card or paper certificate you give away is money you owe, just like a sold card.

It works like your comps, voids and discounts log: a name next to every giveaway.

The monthly check

Unredeemed cards are a liability on your books (our chart of accounts has a line for them), and the number only stays right if someone checks it. Once a month, with the POS's gift card report:

All figures are hypothetical. If the difference isn't zero, look for a card sold but never activated, a card rung as a sale instead of a gift card, or a redemption rung as a discount. The sold and redeemed lines also show on your daily sales and cash report. Track bonus cards separately, so the promotion's cost shows.

Sign the sheet and keep it with the month's books. Once a year, look at the oldest balances with your accountant; some states want unclaimed balances reported.

Where Mays fits

Gift cards themselves live in your POS. Mays helps you write the rules down, teach them and check the numbers:

• The policy where staff can read it. Put the full policy in the Knowledge Base and share the folder with a location or everyone; staff read and search it in the app. See Knowledge base basics and Sharing and visibility.
• A short quiz for cashiers. An admin can turn the policy into a training module under Learning → Modules (Generate from docs drafts the questions from your text). See Creating training modules.
• The monthly check as a form. An admin builds a Gift card check form under Tasks → Types, with Money amount ($) fields for each line, a Text field for the cause of any difference and a Signature. Add it to a Monthly checklist for the manager. Submitted checks land in Task Data, where Export CSV gives you the year. See Building custom forms and Scheduling checklists.
• Catering. If you invoice catering through Mays with Square connected, the Square invoice accepts a card or a Square gift card.

What Mays doesn't do: it doesn't sell, activate or reload gift cards, and it doesn't import gift card sales, redemptions or balances from your POS, so the monthly numbers come from the POS's report.

Write it once, answer it the same way every time

Pick your terms, put them on the card, train the counter, and check the balance monthly. Then every cashier gives the same answer.

Start your free trial: 30 days, every module, no card needed. Or book a walkthrough and we'll set it up with you.