Comments on: What to Put on a Gift Certificate for Your Art

By: Alyson Stanfield

Thu, 12 Sep 2013 19:47:17 +0000

Here’s an updated link for gift cards: http://www.consumer.ftc.gov/articles/0182-gift-cards – from the FTC.

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By: Kathy Nairn

Tue, 13 Dec 2011 04:03:46 +0000

Although I can see that this commentary has been around almost 2 years, it still has some good info. I just wanted to add some ‘bookkeeping’ info to the mix: when you offer gift certificates where a customer has purchased one as a gift, the sale is a liability on your books until the service is rendered and product sold. IE: they purchased a session and an album using the gift certificate as part of the payment at the time the service was rendered. If you live in a state where these certificates have no expiration (by law), then you should always have the money in your account to back up the cert in the event you need to refund it. However… do your certificates state “Non-Refundable” ? Either way, it is my understanding that the money you received for a gift certificate is recorded as a liability on your books. Once the service is rendered and the certificate tendered, you move the money from a liability account to your income (Gross Sales) account. It will / should now be gross income on your books. If it sits for a year on your books as a liability, (meaning you could owe it back out at some point to the customer who purchased it), check with your tax accountant. A portion of it might be taxable.
When you donate a certificate to a charity event, I would think 1) it has no cash value; 2) non-refundable; 3) redeemable only for session or product or both; 4) should not have an expiration since there is no real money involved. As another person commented earlier, donation may be tax deductible but she wondered ‘when.’ Again, I would think once it has actually been used / tendered toward a service or product.
Please double-check with your tax adviser as the laws continually change. I would also suggest that you keep tight record on gift certificates sold / donated, when they were sold / donated and then tendered, and pass these details to your tax accountant at year end.

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By: Ann Ranlett

Tue, 03 May 2011 08:03:27 +0000

Excellent advice! People definitely don’t read, but it’s important to be very specific – better to be safe than sorry.
I rarely donate gift certificates. If I do, it’s for existing works/merchandise only, not a commission. I have no control over a commission purchased via GC. I want to talk to someone before I accept a commission and have the option to decline if the client’s vision and mine don’t match.

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By: Patricia C Vener

Tue, 16 Feb 2010 19:26:07 +0000

Pat Regan, I love your exhibit idea!
As for the woman who bid and received your gift certificates, try thinking about it as she is rewarding herself (perhaps by getting a gift for someone that she mightn’t otherwise) for generously bidding on something charitable. 🙂

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By: Pat Regan

Sat, 13 Feb 2010 22:22:11 +0000

I have donated for years and have used the gift certificate idea . So far I haven’t had but one problem. One woman has gotten my $100 gift certificates at 3 different auctions. I wanted to use the certificates to advertise my work and attract new clients. Thanks for all the advice on expiration dates because she has gotten them in 09 and 2010 and now I have to honor them. This will help solve the problem in the future. An idea that other artists may be interested in was how I presented my work. Not only did I have post cards with resume and contact info I had a CD in a laptop(an old computer) showing my work.I asked that my donation be placed near an electrical outlet. I think a lot more people looked at it than at some of the donations with a few cards or written material.

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By: Zachary McInchak

Tue, 12 Jan 2010 02:35:30 +0000

See, I would have just assumed it could only be used for original work or prints that were offered. Thanks for that link about state gift card laws. I was considering making some of these myself, so it helps to have some backup info.

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By: Patricia C Vener

Mon, 11 Jan 2010 22:23:34 +0000

Alyson, apparently, yes, for some places certain rules for cards don’t apply to paper certificates. I don’t know if that’s because of the nature of the medium or for some other reason.

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By: Alyson Stanfield

Mon, 11 Jan 2010 22:13:59 +0000

I wonder what the difference is between laws affecting gift cards and those for gift certificates–if any. ??
Geri: Thanks for the great question and case study.
Ann: Looks like you’re armed with knowledge and ready to face the world.

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By: Ann Bell

Mon, 11 Jan 2010 18:02:54 +0000

Alyson, thanks for this discussion. I didn’t realize there were so many things to consider.
The gift certifcates I have sold have been for lessons, where no dollar value is specified. Since I expect my prices to rise, I realized the importance of an expiration date. The certificates sold early in the year expire at the end of the current year, unless prior arrangements are made. Later ones expire the end of the next year.
I also include:
“This certificate may be exchanged for group lessons or art. It may not be redeemed for cash.”
Katherine, Thanks for the link to the legal expiration requirements. Looks like I’m legal on that score for the states I’ve sold in.
Ann

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By: Patricia C Vener

Thu, 07 Jan 2010 11:33:36 +0000

Sigh, I hit the post button too soon. The Consumers Union site gives a lot of the state limitations but I suspect these may not be the entirety as I see some of them are quite complex (CT is easy – no expiration, no fees). I have to admit, though, I would not have expected anyone to ask for cash from a gift certificate!

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