Gift Card Refund
A Gift Card Refund refers to the process of returning the monetary value of a gift card to the original purchaser, or alternatively, converting it back into store credit. Refund policies for gift cards are distinct from standard product return policies and require careful consideration of both business needs and legal requirements.
Refund scenarios
- Unused card refund: The buyer requests a cash refund for a card that hasn’t been redeemed at all. Whether this is allowed depends on your policy and local law.
- Partially used card: The buyer or recipient requests a refund of the remaining balance. Some jurisdictions require cash-back for small balances (e.g., under $5 or $10).
- Product return paid by gift card: When a customer returns a product that was purchased with a gift card, the refund amount is typically returned to the gift card (restoring the balance) rather than to a cash payment method.
- Fraudulent purchase: If a gift card was purchased fraudulently (e.g., with a stolen credit card), the card may need to be deactivated and any unredeemed balance refunded or reversed.
Legal considerations
Laws governing gift card refunds vary significantly by jurisdiction. In many US states, retailers are required to redeem (cash out) gift card balances below a certain threshold (often $5 or $10) upon request. Some jurisdictions prohibit “no refund” policies on gift cards entirely. Store owners should consult legal counsel and clearly display their refund policy at the point of purchase.
Implementation in WooCommerce
When processing a refund for an order paid (fully or partially) with a gift card, the system should restore the balance to the original gift card rather than issuing a cash refund. Most WooCommerce gift card plugins handle this automatically when you use the standard WooCommerce refund flow. For manual refunds, ensure the gift card balance is updated in the plugin’s records and that the transaction is logged for the audit trail.