In Canada, Google searches for "carte cadeau" sit around 5,400 a month from February to September and hit 33,100 last December. The usual reflex for an online seller is to add a "Give a gift card" button to its website in November and think about it again after the holidays.
In Quebec, that button commits you to more than it seems. A gift card is a contract governed by the Consumer Protection Act: its value can neither expire nor be eaten by fees, and sales tax is not collected when the money comes in. The loyalty program launched alongside it also becomes a regulated contract as soon as it offers a choice of rewards and one is worth more than $50.
Common point-of-sale tools already handle most of this by default. The risk sits in the promotion bolted onto the card, and in the setting someone changes without knowing why. Returns are covered in our article on Quebec consumer law and returns; this one sticks to cards and points.
The short answer, for the busy
In Quebec, the Consumer Protection Act treats a gift card as a prepaid card (s. 187.1). A card the customer paid for cannot carry an expiry date or become unusable after a period of time (s. 187.3), unless it gives unlimited use of a service, such as a monthly pass. No fee may be charged to the customer for issuing or using the card (s. 187.4), and the merchant must refund a balance of $5 or less on request (regulation, s. 79.5). Before the sale, the merchant must disclose the conditions of use and how to check the balance (s. 187.2). Cards given away free are not covered. For sales tax, selling a gift card is not a supply: GST and QST apply to the purchase paid with the card. A loyalty program offering a choice of rewards, one of them worth more than $50, is also regulated: points cannot expire, except after at least one year of inactivity and a prior notice.
A gift card is a debt with no due date
The Act speaks of prepaid cards, defined broadly in section 187.1 as "a certificate, card or other medium of exchange that is paid in advance and allows the consumer to acquire goods or services from one or more merchants." The Office de la protection du consommateur (OPC) adds that the format does not matter, virtual cards included: the code your website emails after a payment is one.
The central rule: any stipulation providing that a prepaid card "may expire on a set date or by the lapse of time is prohibited" (s. 187.3). According to the OPC, the law also bars setting a period after which the card stops working, such as two years after purchase. The exception is unlimited use of a service for a period, like a one-month pass.
For a card tied to a specific service, such as "one massage," the merchant may charge an extra amount if the price goes up, provided the card shows the price at the time of sale and the date the extra amount starts to apply (regulation, s. 79.2).
No charge may be made to the customer for the issue or use of the card (s. 187.4), the regulation's exceptions covering bank-issued cards and cards usable at several independent merchants. The merchant must refund a balance of $5 or less on request (regulation, s. 79.5), which means planning how to send $3.40 to someone who may never have been your customer. And before the sale, the merchant must disclose the conditions of use and how to check the balance, in writing if it is not on the card (s. 187.2). Online, that means the purchase page and the delivery email.
Breaches of sections 187.3 to 187.5 expose a business to a fine of at least $5,000, up to $125,000 or 5% of worldwide turnover, whichever is greater (s. 278).
Paid value and promotional value follow different rules
The classic December promotion, "buy $100 in gift cards, get $20 free," mixes two things the law treats differently.
According to the OPC, only cards the customer paid for are covered; free cards are not. Its page on group-buying sites confirms it: a voucher may expire only for the discount portion, never for the amount paid.
So keep the two values apart: the paid card with no date, the bonus separately with its own expiry, ideally as a discount code, which is what Shopify's documentation recommends over promotional gift cards. Load the bonus onto the customer's balance and, two years later, nobody can prove which dollars were allowed to expire.
Tax points the same way. Under the Canada Revenue Agency's policy P-202, a voucher with a condition attached, such as a $500 minimum purchase, is not a gift certificate: it is taxable when sold and treated as a coupon when redeemed.
Tax is collected on redemption, not on sale
Section 181.2 of the Excise Tax Act is explicit: "the issuance or sale of a gift certificate for consideration shall be deemed not to be a supply and, when given as consideration for a supply of property or a service, the gift certificate shall be deemed to be money." Section 350.7 of the Quebec Sales Tax Act mirrors it for QST, and Revenu Québec sums it up: tax applies to the item bought with the card, as if paid in cash.
On a website, the gift card product therefore carries no tax at checkout, or the customer pays twice. Tax at redemption follows the item bought and, outside Quebec, the destination, as explained in our article on sales taxes for online stores.
On the accounting side, the money collected is owed to the cardholder until redemption; how that shows in your books is a question for your accountant.
A loyalty program is a contract, unless it is small
The Act also regulates programs where purchases earn "exchange units" redeemable for free or discounted goods or services (s. 187.6).
Two exemptions matter to a small business: a program leading to a single good or service, or one set fixed upfront (regulation, s. 79.6.1), and one where each reward is worth $50 or less at retail (s. 79.6.2). The coffee card whose tenth stamp earns a free coffee, an OPC example, is exempt and may even expire.
Add a $75 reward tier and the program tips over. You must then tell the customer in writing, before they join, how points are earned, how they are exchanged, how they expire and what conversion factor applies (s. 187.7 and regulation, s. 79.6.4). Points can no longer expire on a set date or by the lapse of time (s. 187.8), except after at least one year of inactivity provided for in the contract, preceded by a notice dealing only with the expiry and sent 30 to 60 days beforehand (s. 79.6.3). Converting points into another form of unit, a voucher for instance, cannot be used to make them expire (s. 79.6.5). And you cannot unilaterally cut the number of points awarded or the conversion factor (s. 79.6.6): those two breaches carry an administrative penalty of $2,500 for a business (regulation, s. 187).
The reward ceiling is a legal decision. If your tool cannot send the inactivity notice on time, set no expiry at all.
The member list is a file of personal information
Square Loyalty enrols customers by their mobile number, entered at the register or online at checkout. That number, tied to a purchase history, is personal information under section 2 of Quebec's private sector privacy act. Counting points takes an identifier, not a birth date: the law limits collection to what is necessary (s. 5).
The subtler issue is profiling, which section 8.1 defines as collecting and using personal information to assess a person's characteristics, including preferences and behaviour. In our reading, segmenting members by purchases to target offers fits that definition, and the section then requires telling the person beforehand that the technology is used and how its profiling functions can be activated. The edge cases are covered in our article on what counts as personal information, and the checkbox for promotional emails falls under CASL, covered in our article on newsletter consent.
What your POS already does
Square's Canadian page, as consulted in October 2026, lists digital cards as free to set up, physical cards from 66 cents, and a 2.5% load fee each time funds are added, plus processing fees, all paid by the merchant, not the customer. Square gift cards do not expire, and the merchant can publish an eGift card order page without any development. The same pages list Square Loyalty at $60 to $140 a month per location.
Shopify offers gift cards on every plan and, by default, they never expire. But a setting turns expiry on, and each card created manually can get its own date. For a paid card in Quebec, that setting stays on "never."
Moneris cards are loaded at the terminal, with digital cards for online sales. Moneris quotes a typical delivery of one week after artwork approval: for December, order now.
Custom work makes sense when your website is not on your POS platform and a card bought online must work in the store. Rather than a second balance ledger in the website, connect it to the POS gift card system (Square exposes a Gift Cards API) so only one balance exists. See Shopify or a custom store for the platform choice and our article on online payments for payment collection.
Where to start, six weeks before December
Check your tool's expiry setting, the purchase page and the delivery email. Take any bonus off the paid balance and remove tax from the gift card product. For loyalty, set the reward ceiling knowing what it triggers and collect only what you need to count points.
If your website does not talk to your POS yet, sort that out before the rush.
→ Let's talk about your store and your gift cards
This article explains legal and tax obligations to help an SMB ask the right questions. It is not legal, tax or accounting advice: the rules described carry exceptions depending on the type of card, program and goods, so validate your own situation with the Office de la protection du consommateur, Revenu Québec or a professional. The text of the Act and the regulation prevails.
Written byXavier Peich