With Christmas fast approaching it is a good time to revisit gift card laws, which have changed.
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Traditionally, it has been permissible under Australian Consumer Law for gift card purveyors to place relatively short expiry periods on gift cards from the time of purchase.
Vendor's sell around 34 million gift cards to Australians each year, with a market value estimated at $2.5 billion.
With standard expiry periods being no more than six to 12 months, about $70 million is wasted each year because gift cards aren't redeemed before the expiry date.
As a consequence of the unnecessary wastage and a call for change from consumer advocacy groups, parliament introduced the Treasury Laws Amendment (Gift Cards) Bill 2018, which was passed into law on October 18, 2018, and received Royal Assent on October 25, 2018.
The bill amends the Australian Consumer Law to provide protections for gift card consumers across Australia.
The new laws will be in force from November 1, 2019.
The fundamentals of the new laws (of which consumers should be aware) are as follows:
- a minimum three-year expiry period for gift cards is required from the date of purchase;
- gift cards must display expiry dates, separate documents naming an expiry date will not suffice; and
- no 'post supply' fees can be charged for the use of the card. These are things like an administration fee for paying with a gift card, activation fees or balance enquiry fees, that essentially reduce the value of the gift card (standard fees that would be charged regardless of payment method, for example a booking fee or a fee to reissue a lost and damaged card, are not considered 'post supply' fees).
There are some exceptions to the law changes, the main ones are if:
- the voucher was given by a business for free, as part of a rewards program, or as a bonus when purchasing an item;
- any prepaid card for phone or internet access;
- gift cards or vouchers that are exchanged for goods returned to the supplier;
- gift cards or vouchers that are sold for a particular good or service that is below the market value of that good or service (i.e. a genuine discount); and
- gift cards or vouchers that are sold or donated for use in a fundraising appeal, including to a charity or not-for-profit organisation.
A breach of the new laws can attract penalties of up to $30,000 for businesses or $6000 for sole traders.
The Australian Competition and Consumer Commission (ACCC) also has the ability to issue separate infringement notices.
Each notice is 55 penalty units for businesses and 11 units for sole traders (being $11,500 and $2420 respectively).
If your business offers gifts cards it is important to ensure that you fully across the new requirements and are complying with them so as to avoid an unexpected gift from the ACCC by way of a fine this Christmas.
Dean Frith is a lawyer and partner at Baker Love Lawyers
