Gift cards, holiday promotions and package deals for med spas and practices: the federal rules

If your med spa, aesthetic or dermatology practice, dental office or wellness clinic sells gift cards, runs holiday offers or sells prepaid packages, the end of the year is when those plans get printed and advertised. A gift card looks like a simple product, but federal law sets rules for how long its value must last, which fees can be charged and what has to be printed on the card itself. Bonus cards handed out with a purchase follow a different set of rules. Packages, free add-ons and offers that reach Medicare patients each bring their own questions.

This guide covers gift cards, bonus and promotional cards, prepaid packages and holiday offers for med spas and practices. Several neighboring topics have their own guides, and we link to them instead of repeating them. For the FTC guides on free offers, bait advertising and former price comparisons in detail, see advertising cash prices. For memberships, reviews, influencers and the wider med spa picture, see med spa marketing ideas. For dental membership plans, see dental membership plan advertising, and for monthly payment offers, see advertising patient financing. For matching a competitor’s price or honoring their coupon, see our guide to price matching and competitor coupons. For Black Friday and other limited-time procedure sales, including countdown timers and was and now prices, see our holiday and limited-time sales guide. For holiday sale deadlines and countdown clocks, see our guide to countdown timers and limited-time offers. For vouchers sold through a third-party deal site, see our guide to daily deal sites and fee-splitting rules.

Which federal rules apply to a gift card

The federal gift card law is section 915 of the Electronic Fund Transfer Act, 15 U.S.C. 1693l-1, added by the Credit CARD Act of 2009 (Pub. L. 111-24). Its rules are in Regulation E at 12 CFR 1005.20. The regulation covers three kinds of cards. A “gift certificate” and a “store gift card” are both issued on a prepaid basis, primarily for personal, family or household purposes, “in a specified amount”, in exchange for payment, and are redeemable at a single merchant or an affiliated group of merchants. The difference is that a store gift card may be reloaded and a gift certificate may not. A “general-use prepaid card” works at multiple unaffiliated merchants or at ATMs. A practice selling its own cards is dealing with the first two.

The definitions say “card, code, or other device”, so an e-gift code sent by email counts as well as a plastic card. The official interpretation gives the example of a merchant that emails a code a consumer can redeem in a specified amount online or in the store, and says that code is covered unless an exclusion applies.

The phrase “in a specified amount” matters for practices. The official interpretation says a card redeemable for a specific service or “experience,” and it names “a spa treatment” as an example, generally is not subject to the section because it is not issued in a specified amount. It then adds that a certificate “redeemable for a spa treatment up to $50” is covered, and so is a card that states a value such as “a $50 value”. In practice, a card that says “one facial” and nothing more sits in a different place from a card that says “$100 toward any treatment” or “a $150 value”.

Expiration dates: the five-year floor

Under 15 U.S.C. 1693l-1(c), a covered gift certificate or store gift card may carry an expiration date only if the date is not earlier than 5 years after the date the certificate was issued, or the date funds were last loaded to a store gift card, and the terms of expiration are clearly and conspicuously stated.

Regulation E adds detail at 12 CFR 1005.20(e). The expiration date for the underlying funds must be at least the later of five years after issue or last load, or the expiration date of the card itself. The card has to disclose the expiration date for the funds, or the fact that they do not expire. If the plastic card expires before the funds do, the card generally has to say so with equal prominence and in close proximity to the card expiration date, tell the holder they can contact the issuer for a replacement, and give a toll-free number, plus a website if one is maintained, for getting a replacement. No fee may be charged to replace the card or to give the holder the remaining balance in some other manner before the funds expire, unless the card was lost or stolen.

A line printed on a holiday card such as “valid for 12 months” on a covered card is the kind of term this rule addresses. A card with no expiration date at all does not have to meet the expiration conditions in 1005.20(e), but state law still applies, as covered below.

Fees: dormancy, inactivity and service fees

Under 12 CFR 1005.20(d), no one may charge a dormancy, inactivity or service fee on a covered card unless all three of these are true: there has been no activity on the card in the one-year period ending on the date the fee is charged; the card itself states the amount of the fee, how often it may be charged and that it may be charged for inactivity; and no more than one such fee is charged in any calendar month. A service fee, as the regulation defines it, includes a periodic fee for holding or using the card, and the official interpretation treats a balance inquiry fee as a type of service fee.

Other fees, such as a fee to buy the card, have their own disclosure rule at 1005.20(f): the type of fee, the amount or how it is set, and the conditions under which it applies must be given on or with the card, and a toll-free number, plus a website if one is maintained, for fee information must be on the card. A card with no fees of any kind avoids these conditions.

Where the disclosures have to appear

Regulation E is specific about placement. Under 1005.20(c)(3), the fees and the terms of expiration have to be disclosed to the buyer before the purchase, and those fees and terms cannot be changed after the purchase. Under 1005.20(c)(4), the disclosures that must be on the card have to be on the card itself. A disclosure in a separate terms document, on the packaging, or on a sticker or label stuck to the card does not count. For an electronic card or code, the disclosures have to be provided electronically on the card or code that the consumer receives.

That has practical effects for a holiday rush. If the front desk sells cards from a stack of blank plastic with a sticker on the back, or the e-gift email shows only an amount and a code, look at what the card or email itself says before the season starts. Online gift card checkout pages should show the fee and expiration terms before the buyer pays.

Bonus and promotional cards follow a different rule

A familiar holiday offer is a bonus card: buy a $100 gift card and get a $20 card free. Regulation E treats a “loyalty, award, or promotional gift card” separately. Under 12 CFR 1005.20(b)(3), it is excluded from the fee and expiration rules that apply to purchased cards, but only if it carries the disclosures in 1005.20(a)(4)(iii):

• A statement that the card is issued for loyalty, award or promotional purposes, on the front of the card. The official interpretation says a word such as “Reward” or “Promotional” on the front is sufficient.
• The expiration date for the underlying funds, on the front of the card.
• The amount of any fees and the conditions under which they may be charged, on or with the card.
• A toll-free number, plus a website if one is maintained, for fee information, on the card. The official interpretation says this is not required if the promotional card has no fees.

The official interpretation lists examples of programs that produce these cards, including sales promotions, rebate programs, referral programs and contests. So the purchased $100 card keeps the five-year floor, while the $20 bonus card can expire sooner if its front says it is promotional and shows the date. Printing both on identical card stock with no distinction is how a bonus card ends up looking like a purchased one.

The bonus card is also a free item offered with a purchase, so the FTC Guide Concerning Use of the Word Free applies to how it is advertised. Under 16 CFR 251.1(c), the terms and conditions of a free offer should be set out clearly and conspicuously at the outset, in close conjunction with the offer, not in a footnote reached by an asterisk. Under 251.1(i), calling the item a “bonus” or a “gift” does not fix an offer that fails the guide. Conditions such as “bonus card valid January 2 to March 31, not valid on the day of purchase” belong next to the offer. The rest of the free offer guide, including regular price and frequency limits, is covered in our cash price advertising guide.

Bonus cards handed out for something other than a purchase raise other issues. A card given in return for a review conflicts with Google’s review policies and the FTC rule on consumer reviews, which our med spa marketing guide covers. A card given in return for referring a patient is a referral reward; see patient and physician referrals before offering one.

Paper certificates and other exclusions

Regulation E lists other exclusions at 1005.20(b), and one of them matters for practices that hand-write certificates: a certificate “issued in paper form only”. The official interpretation explains that the exclusion applies where the paper itself is the only way the certificate was issued, such as a paper certificate the merchant fills in with the holder’s name and amount. It does not apply to a code or certificate first delivered electronically, even if the consumer prints it at home. Other exclusions cover cards not marketed to the general public and reloadable cards not marketed or labeled as gift cards.

An exclusion from Regulation E is not an exclusion from everything. State gift card laws may still apply, and so do the FTC Act’s rules against deceptive practices under 15 U.S.C. 45, which reaches acts “in or affecting commerce”. A paper certificate that says “no expiration” in the ad and “valid 6 months” in small print on the back is a problem whatever Regulation E says.

State gift card laws

Federal law sets a floor, not a ceiling. 15 U.S.C. 1693q says the federal provisions do not affect state laws on dormancy fees, inactivity charges, service fees or expiration dates of gift certificates and store gift cards, except to the extent those laws are inconsistent, and that a state law is not inconsistent if it gives consumers greater protection. A state law can set stricter limits on expiration or fees than the federal rule, or add other gift card rules, such as how unused balances are handled. Check the law where you sell and where your patients are before you design the card, and recheck if you open a location in another state.

Prepaid packages and treatment series

Packages, such as a series of sessions sold at one price, are a different product from a gift card. Following the official interpretation discussed above, a package redeemable for named services and not issued in a specified amount generally falls outside 1005.20, while a package or card stated as a dollar amount or “a $600 value” is the kind of card the interpretation describes as covered. State law may treat prepaid services in its own way.

Medical and aesthetic treatments are not ordinary retail goods, and a package should be written with that in mind. A clinician may decide at the consultation that a treatment is not appropriate for the person who holds the card or package, or that a different number of sessions is right for them. A holiday gift buys a treatment; it does not replace the clinical assessment. Before you sell, write down and show the buyer what happens in each case: whether the value can be applied to another service, transferred, refunded or kept on account, and how long unused sessions remain available. The FTC’s approach to advertising, set out under 15 U.S.C. 45 and the FTC Health Products Compliance Guidance, looks at the net impression of the offer, so the terms that limit a package should be as visible as the price.

Package and promotion copy that describes results falls under the same caution as any other health claim. For services, the same caution makes sense: the FTC approach generally requires that health-related claims be backed by competent and reliable scientific evidence. A holiday banner promising that a series will take years off a face, or a stated weight loss by New Year’s, is a claim that needs that kind of support, and gift buyers are not a reason to relax it.

Patients with Medicare or Medicaid

A holiday promotion that reaches patients with Medicare or Medicaid raises a separate federal question. Under 42 U.S.C. 1320a-7a(a)(5), a person who offers or transfers remuneration to a Medicare or state health care program beneficiary, which the person knows or should know is likely to influence the beneficiary to order or receive items or services from a particular provider, practitioner or supplier payable by those programs, can face civil monetary penalties. The statute’s definition at 1320a-7a(i)(6) includes transfers of items or services for free or for other than fair market value, with listed exceptions.

The OIG policy statement of December 7, 2016 says it interprets nominal value as a retail value of no more than $15 per item or $75 in the aggregate per patient on an annual basis, and states that “the items may not be cash or cash equivalents.” A cosmetic service that Medicare does not pay for is outside the program, but a practice that also provides covered services, such as a dermatology practice with a cosmetic side, should not assume a free gift card or holiday discount mailed to every patient is outside the statute. Ask counsel whether a gift card counts as a cash equivalent and whether any exception applies before an offer goes to patients with Medicare or Medicaid. Our guide to marketing to Medicare patients covers the rest of this area.

Privacy: the buyer and the patient are different people

A gift card bought by one person for another creates a privacy question a retailer does not have. Under 45 CFR 160.103, health information includes information that relates to the provision of health care to an individual. Whether the recipient booked a treatment, which treatment they had and when, relates to their care. When a buyer calls to ask whether their gift was used, the front desk is being asked about another person’s care.

Decide in advance what staff will say, with counsel, and script it. A front desk script can limit the answer to whether a card number is valid, without confirming whether the recipient came in or what they had done. Promotional emails to your own patients about your own services are covered in HIPAA marketing rules and healthcare email marketing; under 45 CFR 164.501, a communication describing a health-related product or service that the covered entity itself provides is generally excluded from the definition of marketing, unless the practice receives financial remuneration from a third party for making it.

Running holiday offers in Google Ads

Google Ads promotion assets show an offer below a search ad, with a monetary or percentage discount, an optional occasion label and optional promotion dates. Google’s help page lists the occasions and the date windows in which each can show; for example, Black Friday runs October 15 to December 15, Christmas November 1 to January 15, New Year’s December 1 to February 28 and Valentine’s Day January 15 to February 28. It also says occasion promotion assets must be created or edited within 6 months of their start date to be eligible to serve.

Two details on that page matter for a practice. First, set promotion dates that match the real offer, so the ad does not keep promoting it after it ends. Second, Google describes automated promotions as a feature that sources, validates and displays deals and offers from your website and other sources. An expired holiday offer left on your site can surface in ads, so take ended offers off the site, not only out of the ad account.

The ad text and landing page also have to fit Google’s Healthcare and medicines policy. That policy says Google does not allow prescription drug terms in ad text, landing pages or keywords, with exceptions for websites accessible only to healthcare professionals, brick-and-mortar pharmacies and pharmaceutical manufacturers. A holiday offer built around a prescription injectable’s brand name is likely to run into that rule; our Google Ads for med spas guide covers wording that works.

Illustration: fixing a holiday gift card plan

Illustration. A med spa plans its holiday sale. Purchased plastic cards say “Valid 12 months” on a sticker. E-gift emails show only the amount and a code. A $20 bonus card comes with every $100 card, printed on the same stock. A six-session package is advertised as “a $900 value, use by June”. A mailer offering a free add-on goes to the full patient list, which includes patients of the medical dermatology side who have Medicare. The Google Ads promotion asset has no end date.

1. Purchased cards. The sticker comes off. The new cards are printed with no expiration date and no fees, and the online checkout states that before purchase. The e-gift email template is updated to show the same terms.
2. Bonus card. It is reprinted with “Promotional” and its expiration date on the front. The ad and sales page put the bonus card’s dates and conditions right next to the offer.
3. Package. Counsel reviews the “$900 value” wording and the June date against 1005.20 and state law. The package terms now say what happens if a clinician decides at consultation that the treatment is not appropriate.
4. Mailer. Counsel reviews the free add-on under 42 U.S.C. 1320a-7a(a)(5). The practice sends it only to the cosmetic patient list, or drops the add-on, as counsel advises.
5. Front desk. A short script tells staff to confirm only whether a card number is valid when a buyer calls about a gift.
6. Ads. The promotion asset gets an end date matching the offer, and the offer page is set to come down when it ends.

Checklist

• Each card type identified: purchased gift card, e-gift code, paper certificate, bonus or promotional card, prepaid package.
• Purchased cards with no expiration, or funds that last at least five years from issue or last load, stated on the card.
• No dormancy, inactivity or service fees, or fees that meet every condition in 12 CFR 1005.20(d) and appear on the card.
• Fee and expiration terms shown before purchase, online and at the desk, and never changed afterward.
• Disclosures on the card or e-gift itself, not on a sticker, sleeve or separate terms page.
• Bonus cards marked “Promotional” or “Reward” on the front, with their expiration date on the front.
• Free offer conditions next to the offer, not behind an asterisk.
• Package terms covering clinical unsuitability, transfers, refunds and how long sessions remain available.
• Offers to patients with Medicare or Medicaid reviewed by counsel against 42 U.S.C. 1320a-7a(a)(5).
• A front desk script for gift buyers that does not disclose the recipient’s care.
• State gift card law checked for every state where you sell.
• Ad promotion dates that match the offer, and expired offers removed from the website.

Points programs, refer-a-friend credits and review rewards are covered in our guide to patient rewards program rules.

Offering a gift card or treatment as a prize? Our giveaway and sweepstakes guide covers free entry, official rules, state filing and the prize limits for patients with Medicare or Medicaid.

How we help

We build websites, local search, Google Ads and AI front desk tools for independent practices. For a holiday promotion, that means offer pages with the terms next to the offer, gift card checkout pages that show fees and expiration before payment, promotion assets with dates that match the offer, and front desk scripts for gift buyers. Your counsel approves card terms and offers before they go live. Our work is built with HIPAA in mind. We confirm in writing what a BAA covers before any patient information flows through a tool, and if it is not covered, we do not route patient information through it.

Sources

• 15 U.S.C. 1693l-1: General-use prepaid cards, gift certificates, and store gift cards
• 15 U.S.C. 1693q: Relation to State laws
• 12 CFR 1005.20: Requirements for gift cards and gift certificates
• 12 CFR Part 1005, Supplement I: Official Interpretations (section 1005.20)
• 16 CFR 251.1: Guide Concerning Use of the Word Free and Similar Representations
• 15 U.S.C. 45: Unfair methods of competition unlawful
• FTC: Health Products Compliance Guidance (December 2022)
• 42 U.S.C. 1320a-7a: Civil monetary penalties
• OIG: Policy Statement Regarding Gifts of Nominal Value to Medicare and Medicaid Beneficiaries (December 7, 2016)
• 45 CFR 160.103: Definitions
• 45 CFR 164.501: Definitions (marketing)
• Google Ads: About promotion assets
• Google Ads: Healthcare and medicines policy

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