The New Gift Card Law Changes That Keep On Giving……(for longer)
If you’re giving or receiving gift cards this Christmas it’s good to be aware of some changes to the law.
Gift cards are popular and their use is on the increase. It’s said that about $2.5b worth of Gift Cards are purchased each year. They have become a staple item in many Santa Sacks when people don’t know what to buy.
The latest stats suggest there are around $70m in unused gift cards per year! It’s no surprise to hear that retailers are always eager to sell gift cards, as a certain percentage of them will go unredeemed or partially redeemed.
For businesses, it’s a great marketing and sales tool to increase cash-flow during the Christmas season. The breadth of businesses offering gift cards is expanding at a fast pace. Everything from Uber to travel vouchers, restaurants, online software and streaming services such as Stan. In fact, almost anything that can be sold as a consumable, now it seems can be sold as a gift voucher.
In Australia, as of 1 November 2019:
Cards must be valid for a minimum of three years.
The expiry date must be CLEARLY visible, or if there is no expiry date the words “No Expiry Date” must be shown
There is a ban on post-purchase fees (costs to activate the card or check the balance)
Who Does This Apply To?
The new laws apply to ALL gift cards or vouchers sold from 1 November 2019. The gift card does not need to be a physical card – it can be an electronic version.
However, gift cards and gift vouchers given as compensation or as part of a promotion are treated differently, and the new rules don't apply to those vouchers. So there is still a small grey area here.
If a business changes hands - the new owner MUST honour existing gift cards if the business was sold as a “going concern”.
Why The Change?
The ACCC received regular consumer complaints about cards expiring and not being usable. As a result, the consumer got nothing and the retailer kept the cash.
The ACCC was also getting complaints about retailers charging fees (unreasonably) for consumers to access the funds on their gift card.
If You Supply Gift Cards in Your Business You’ll Need To Make Sure You’re Compliant.
This includes checking that the expiry date is clearly displayed and the terms and conditions are attached to your gift card.
If you supply (or want to supply gift cards) in your business, please get in touch for a complimentary discussion.
You can check out more information on the ACCC website.