Vermont recently amended its gift certificate law to specifically address the distinction between the "paid value" and the "promotional value" of a daily deal gift certificate. The amended law now defines "paid value" as the value of any money or other thing of value given in exchange for a gift certificate" and promotional value as "any value shown on a gift certificate in excess of the paid value of the gift certificate." The law provides that the promotional value is exempt from the restrictions on the paid value, including restrictions on the expiration date and fees that may be charged. The law also now exempts promotional gift certificates awarded pursuant to a loyalty program or other promotional offer provided the gift certificate (i) indicates on the front of the gift certificate that the gift certificate was issued for promotional purposes, (ii) indicates on the front of the gift certificate the expiration date of the promotional value and paid value, if any, (iii) indicates the amount of any fees that may be imposed in connection with the gift certificate, if applicable, which may be disclosed on or with the gift certificate, and (iv) if a fee is assessed, includes a toll-free phone number and, if maintained, a website where the consumer can obtain information about the fee.
In addition to the new provisions addressing promotional value, the amendments also remove an exemption under the law previously covering gift certificates redeemable for food products and add an exemption for gift certificates donated to charities, provided the expiration date is clearly and legibly printed on the gift certificate. The amendment also increases the minimum expiration period for gift certificates from three years to five years, consistent with similar laws in many other states. The amendments were effective May 18, 2012.
TIP: The recent changes to Vermont law permit companies to sell a gift certificate in Vermont with a both a "promotional value" and a "paid value," and the "promotional value" may be subject to a shorter expiration date that the "paid value" of the gift certificate. Companies should ensure expiration dates for both paid and promotional values, as well as any other required disclosures, are clearly and prominently stated on the front of the gift certificate and should make efforts to clearly communicate promotional value expiration dates to consumers prior to purchase to avoid confusion.
Sara Skinner Chubb
; Brian D. Fergemann