When you donate a certificate to a charity event, I would think 1) it has no cash value; 2) non-refundable; 3) redeemable only for session or product or both; 4) should not have an expiration since there is no real money involved. As another person commented earlier, donation may be tax deductible but she wondered ‘when.’ Again, I would think once it has actually been used / tendered toward a service or product.

Please double-check with your tax adviser as the laws continually change. I would also suggest that you keep tight record on gift certificates sold / donated, when they were sold / donated and then tendered, and pass these details to your tax accountant at year end.

I rarely donate gift certificates. If I do, it’s for existing works/merchandise only, not a commission. I have no control over a commission purchased via GC. I want to talk to someone before I accept a commission and have the option to decline if the client’s vision and mine don’t match.

As for the woman who bid and received your gift certificates, try thinking about it as she is rewarding herself (perhaps by getting a gift for someone that she mightn’t otherwise) for generously bidding on something charitable.

Geri: Thanks for the great question and case study.

Ann: Looks like you’re armed with knowledge and ready to face the world.

The gift certifcates I have sold have been for lessons, where no dollar value is specified. Since I expect my prices to rise, I realized the importance of an expiration date. The certificates sold early in the year expire at the end of the current year, unless prior arrangements are made. Later ones expire the end of the next year.
I also include:

“This certificate may be exchanged for group lessons or art. It may not be redeemed for cash.”

Katherine, Thanks for the link to the legal expiration requirements. Looks like I’m legal on that score for the states I’ve sold in.

Ann