‘Tis The Season! Gift Card Dos and Don’ts for Medical Spas and Aesthetic Centers
The Holiday shopping season is upon us, and as we all know, one of the ways aesthetic centers and med spas boost end-of-year sales is through selling gift cards. They are a great minimal-effort gift idea, a starting point for upselling, and a way to gather cash-on-hand immediately, while creating an opportunity for return consumer business in the future. But unlike traditional retail stores, because medical spas involve the practice of medicine, there are a number of legal issues that prevent them from using gift cards in all of the same ways a day spa might.
For instance, providing gift cards to customers for bringing friends to the business is considered an illegal kickback in most states that carries serious – even criminal – consequences. Anti-kickback laws exist to encourage practice building through excellent care rather than potentially “buying patients” and giving gift cards to patients in a medical setting can cross this line since the cards have a cash value attached.
This doesn’t mean you can’t express appreciation to your loyal medical spa patients and customers – there are just specific paths you have to take.
First, since medical spas set their own prices, providing repeat patients with a discount – for instance, purchase ten treatments and get the 11th half-off – on a service is a much better practice than giving a gift card or other cash-equivalent.
It may not seem like there’s much of a difference between handing out cash value on a gift card and giving a discount on a treatment, but with regard to the law the distinction is important and could be the difference between operating compliantly or getting hit with fines and other penalties. Because there are so many different laws and regulatory agencies governing medical spas it can be very difficult to ascertain what is and is not appropriate and legal for your business. Be sure to consult with a local healthcare attorney to find out more about laws governing kick-backs and fee-splitting in your state.