GIFT CARD FAQ
Thank you for your inquiry about LOGAN FARMS Gift Cards.
The following FAQs cover most of the questions we are asked about the Logan Farms gift card program. We usually share this set of FAQs with customers either purchasing gift
Q: Why doesn’t the Product gift card tell me a monetary value, when I use the online balance inquiry link (or ask a Logan Farms employee)?
Q: How do Cash cards work?
A: Cash cards can be loaded with a value, then the recipient may use
Q: Why do the gift cards expire after 5 years?
A: There are a few very good reasons for this. In the interest of simplicity, we will try and keep our discussion of it concise.
Economic: First, about five years ago
Financial: Secondly, when un-redeemed gift cards stay on the books from year to year, they reside on our balance sheet as a ‘liabilities’. When they are redeemed, and only when they are redeemed, are they listed as ‘revenue’. This will be true for any business offering gift cards. Assume a business sells, say $200,000 in gift cards each year, and $10,000 of these cards end up being un-redeemed each year. After 5 years, that would mean that there would be $50,000 in ‘outstanding debt’ a business could rack up on its financial statement. LOGAN FARMS has been in operation since 1984. This would result in quite a large chunk of liabilities we would be saddled with, should we just never expire them, so we expire these cards every five years, and release ourselves from this debt.
Federal Law: Several years ago the US Congress adopted national standards that would protect gift cards consumers, the “Credit CARD Act of 2009,” and under that
Regulatory: Lastly, and always important, there are state and Federal laws governing the sale of gift cards. The IRS and many state tax authorities clearly define that a tax must be paid on the gift card at the time it is redeemed. LOGAN FARMS bears this responsibility, then, upon redemption. Should un-redeemed cards float around without expiration, the government cannot collect the taxes it deems due, so we expire un-redeemed cards after 5 years, and then pay taxes to the government on that amount.