The gift card appears to have become the new coin of the realm, perhaps even surpassing the credit card. Gift certificates and gift cards to restaurants were especially popular to give and receive this year, especially in Rhode Island, where they never expire.
R.I. General Law states that a gift certificate means a promise made for monetary consideration by the seller or issuer that goods or services will be provided to the purchaser or owner of a gift card or certificate.
The Ocean State is one of only seven that does not allow expiration dates on gift certificates and cards. According to the National Conference of State Legislatures, Connecticut does not either. Massachusetts allows expiration dates on gift certificates of no less than seven years from the date of issue.
However, there are other issues to consider: What happens if the consumer does not use the entire value of a certificate to pay for one restaurant check – does the restaurant have to give change? Is the restaurateur allowed to place restrictions on what may or may not be purchased? Does the new owner of a restaurant that has changed hands have to honor an old certificate?
The law addresses some of these issues, and the marketplace appears to do a good job of taking care of the others without the need for more legislation.
As far as getting change back, the law says it is perfectly all right. From the law: “Any unused portion of a redeemed gift certificate shall be afforded to the consumer by reissuing the gift certificate for the unused amount or providing cash where the balance due the consumer is less than one dollar.”
However, the law states, this does not apply to a promotional or loyalty gift certificate or discount coupon that was not paid for, such as one from an advertisement or so-called frequent shopper program.
Restrictions can be placed upon such a card so long as those restrictions are disclosed at the time the certificate is purchased.
The matter of the restaurant changing hands is not so clearly defined in the law. Retail consultants and one restaurant-group owner I spoke to for this article stated that generally speaking, gift certificates remain on a business’s books as a liability to be negotiated between buyer and seller. Bill Pinelli, president of Pinelli-Marra Restaurant Group, had experience on both sides last year as his company acquired Waterplace Restaurant in Providence and sold North End Café in North Providence.
“We honored certificates from the previous owner of Waterplace unconditionally for the first six months we were open. … But if someone comes to us with an old certificate for hundreds of dollars, we are in a difficult position. We sympathize with the person who may have purchased the certificate [from the previous owner] and will do all we can to make them happy.”
When Pinelli-Marra sold its restaurant, the company made an agreement with the new owner so that a gift certificate holder for Pinelli’s North End Café would be able to use that certificate at face value at the new North End Café. As retail consultant Larry Donahue stated, “Consumers don’t care or understand what ‘Under New Management’ means.” As Pinelli puts it, “Our name is still on that certificate.”
Again, the entrepreneurial nature of the majority of restaurants in Rhode Island comes through to diffuse what could be a sticky consumer-rights issue without any government involvement. That is a gift to us consumers indeed. •
“Dining Out with Bruce Newbury” can be heard on TalkRadio 920 WHJJ-AM Fridays at 6 p.m. and Saturdays at noon. He can be reached by e-mail at bruce@ brucenewbury.com.
