The Legal Reality: Do MedSpas Have to Refund Clients?
Whether a closing medspa must provide refunds depends on the legal and financial condition of the business. If a business files for bankruptcy, clients with pre-paid packages become unsecured creditors and are typically last in line to recover funds. Gift card laws focus on expiration dates, not redemption if the business no longer exists. When there are no assets left, gift cards become worthless. Clients can sometimes pursue chargebacks through credit card issuers or file complaints with state attorneys general, but recoveries are often limited. Sudden closures can generate negative press, as happened when Satin Med Spa in Charlotte shut down and refused refunds.
Why Honoring Lost Gift Cards Is a Strategic Move
The Anchorage Community decision to honor another businesses gift cards wasn’t just generous—it was strategically brilliant. Honoring lost credits costs a business the material cost of a service in the short term, but it builds trust and loyalty that far outweigh the expense. Clients who feel rescued become advocates, spreading positive word-of-mouth and often purchasing additional services.
Examples of Community Response
The Anchorage situation isn’t an outlier. When Small Indulgences Day Spa in St. Augustine suddenly shut down, customers were left holding unusable gift cards — and several St. Augustine businesses stepped in to honor them, helping stranded clients regain some of their lost value. Local coverage confirmed that “some St. Augustine businesses are honoring the gift cards” after the abrupt closure and pending bankruptcy filing (Action News Jax, First Coast News).
A similar story unfolded in Charlotte. After Satin Med Spa closed without warning — citing a “devastating outside situation” — another provider, Dr. Tonya McLeod, offered free cosmetic consultations to affected clients, helping them understand their options and regain a sense of stability during an unsettling moment. That gesture was reported widely and praised by patients who suddenly found themselves without services they had already paid for (WCNC).
These moments of stepping up — whether honoring gift cards or offering no-cost consultations — consistently generate goodwill and strengthen the reputation of the businesses willing to help.
MedSpa Mastery Action Plan
Here’s how your medspa can turn competitor closures into an opportunity to lead:
- Create a Community Credit Policy: Draft a policy stating that you will honor a percentage of unused gift cards or packages from recently closed medspas (for example, 50% up to $200) with proof of purchase.
- Control the Narrative: When a competitor closes, issue a statement offering support to affected clients. Emphasize integrity and your commitment to the industry.
- Educate Clients: Use your blog and social media to advise clients on protecting large purchases—such as paying with credit cards for chargeback protection and keeping receipts. This builds trust and demonstrates your commitment to client welfare.
Trust is currency in the medspa world. While honoring lost packages and gift cards may seem like a short-term cost, it’s actually a long-term investment in your brand’s reputation. Natasha’s story shows that doing the right thing can pay dividends in client loyalty and industry leadership.
