The first gift card problem is never the sale. It is the Tuesday in March when somebody arrives with a card bought in December, a torn envelope and a question you have not decided the answer to. The card is for $50, the haircut is $65, and they would like the difference on their debit card.
A policy is just the answers, written down before you need them. Here are the six questions it has to settle.
1. Does it expire?
Decide this knowing that much of it is decided for you. In the US, federal rules say the money on a gift card sold with an expiry date must stay good for at least five years from the date it was issued or last loaded, and an inactivity fee can only be charged after a full year with no activity, at most once a month, and only if the fee is printed on the card. Several states go further and bar expiry altogether. Those rules cover cards issued electronically; a card issued on paper only is excluded from the federal rule, though not from your state's.
The simplest policy that is legal everywhere is no expiry. It also causes the fewest arguments, and an argument over $20 at the counter costs you more than the $20.
2. What happens to a lost card?
If the card is a code tied to a record you hold, you can look it up, see what is left, switch the old code off and issue a new one. If the card is a printed voucher with no record behind it, a lost card is lost, and your policy should say so at the point of sale.
So the policy follows the system. Sell cards that are tracked, and "we can replace a lost card if you bought it from us and we can find the purchase" becomes a promise you can keep.
3. Can it be refunded?
Two different questions hide here. The buyer who changes their mind the next day is a refund of a sale, and most businesses allow it within a short window if nothing has been spent. The recipient who wants cash instead of goods is a different matter: some states require you to pay out small remaining balances in cash, and the threshold differs by state, so check yours before writing "no cash value" on anything.
Whatever you decide, decide it for the two cases separately.
4. What about the leftover $7?
A balance that is smaller than anything you sell is the quiet problem. The clean answer is that the card keeps its balance and can be spent against a later purchase, which is what a card with a real balance does: spend $43 of $50 and $7 stays on the card. A single-use voucher cannot do this, and the leftover becomes either a loss to the customer or a cash-out question for you.
5. Who can spend it, and where?
A code is money. Say whether it can be used online, in person, or both; whether it can be combined with a discount code; and whether it can be used to buy another gift card (most businesses say no, because that is how a stolen code gets laundered into a clean one). Say it on the page where the card is sold, not only in the terms.
6. How do you record the money?
An unredeemed card is money you owe in goods or services. Record it as a liability when sold and as revenue when redeemed, or a strong December turns into a hole in a later month. Keep the outstanding total visible; it is future work already paid for.
Two things follow from that. Unredeemed balances can, in some states, become reportable unclaimed property after a dormancy period; the state treasurers' association keeps a table of how each state treats gift certificates, and it ranges from exempt to several years. And if you ever sell the business, those balances go with it.
Write it where it is read
A policy in a drawer protects nobody. Put the short version on the gift card page and on whatever the recipient receives: expiry (or none), lost-card rule, where it can be spent, and how to check a balance. The long version lives in your terms.
If you run your cards as codes with a balance, the mechanics are in gift cards: issue, email, check the history, deactivate a lost one. The case for selling them at all is in gift cards for a small business.
Questions
Can I charge a fee to replace a lost card?
Nothing in the federal rule stops a replacement fee, but check your state, and ask whether it is worth the ill will. A customer who lost a gift to your business is already having a bad day.
Do I have to accept a gift card bought from the previous owner?
If you bought the business, usually yes, because the liability came with it. Agree the outstanding balance as part of the sale.
Can a gift card be used for a deposit?
Your call, and most businesses allow it: a deposit is a payment, and the card is money already paid. Say so if you take deposits for appointments or orders.
Should staff be able to issue cards?
Only the people who can take money should be able to create it. A card issued by hand with no sale behind it is a gift from you, so limit who can issue and keep a reason on every one.