What occurs when a gift card expires?

[ChildFundNZ]

Hi there - 

I am wondering what happens to the fund balance of a Shopify gift card once the card expires? Is it transferred to the store owner?

[Cal · Accepted solution]

Hey @ChildFundNZ!

Cal here from Shopify, thanks for reaching out to us. This is a great question and I'd be happy to give you some insight into this. 

Gift cards can be set to expire after a specific amount of time. By default, gift cards don't expire because it is illegal in some countries for gift cards to expire. If you set an expiry date, then, by default, the cards expire after five years. However, you can change the length of the expiry date. Verify that you are following the rules and regulations for gift cards in your country. 

There is further information on how you can alter the gift card expiry date here. 

When a customer purchases a gift card, you are receiving their funds at that point. It is then up to the customer to redeem the gift card on your store for your products/services. 

I suggest giving our help center document on Gift Cards a read here. It goes into great detail on what gift cards are and their applications! I hope this helps.

[ChildFundNZ]

Thank you Cal. It was unclear that the funds would be transferred upon the purchase of the gift card. For some reason, I was under the impression that the funds would only be transferred upon redemption. 

Thanks again for your help!

[Cal]

No problem! Glad to help. Let us know if there's ever anything else you need assistance with. 

[RobS]

Related to this, I've noticed that when gift cards expire unredeemed then althought the card can no longer be used, the balance remains in the gift card liability in Shopify. Surely this isn't correct? By definition, if it has expired we can no longer be liable for the value. Does this mean I have to manually work through all the gift card purchases to figure out the actual real liability for our accounts?

[Cal]

Hi @RobS, how are you keeping? 

I'd be happy to look into this with you. Can you give me a little more information on where you are seeing/pulling this data from? If you could attach some screenshots that illustrate this that I could run past my team here, that would be great! 

Thanks! 

[MatW]

Hi Cal - I'm also looking for an answer to the issue that @RobS raises here. I've just discovered that per Shopify's own guidelines:

When a gift card expires:

Any remaining outstanding balance on the gift card will continue to count toward your outstanding gift card balance, which is shown in the Liabilities finance report.

I don't understand why an expired gift card would continue to count towards liabilities - can you explain this? It has significant implications for tax reporting, so if this is in fact the case, we'll need to know if there's a simple way to purge/disable expired cards and what disabling these expired cards might mean (presumably it means something, otherwise why would Shopify keep these balances active as a liability...?).

Thanks for your help

[Freda2]

Hi,

I am also looking for the answer to all that @MatW raises here.

Any reply Shopify?   (Thanks)

[RobotSocks]

I am also looking for the answer to questions posed by @RobS.  How / why do expired gift cards remain in the gift card liability balance in Shopify?

[klk1]

I am also looking for an answer - why do expired gift cards remain in the gift card liability balance?  Why do expired gift cards appear when searching Gift Cards  "Redeemable" ??   Is it necessary to go in and manually deactivate expired gift cards?   If so, why???  We are on Shopify Plus which is extremely expensive and shouldn't require time sucking work arounds.