Changes to the law on Gift Cards
New Gift Card rules from 1 November 2019
New national rules about gift cards and vouchers that will benefit consumers will come into effect on 1 November 2019.
Australians leave around $70 million unused on gift cards each year. A survey last year found that men were more careless with gift cards, leaving an average of $69 on expired gift cards, compared to $45 for women.
Minimum 3 year expiry period
Gift cards issued from 1 November 2019 will have a minimum three year expiry period. The period begins from the date the gift card is sold to a consumer. Businesses can choose to apply an expiry period longer than 3 years and no maximum expiry period applies. Some business such as Woolworths and Bunnings already have open-ended gift cards.
The legislation will also introduce rules to ensure expiry dates are prominently displayed on the cards. The expiry date must be set out prominently on the gift card itself. Displaying the expiry period on a separate document at the point of sale is not sufficient. If gift cards do not specify a certain date on their expiry, the date must be the last day of the month.
Restrictions on fees
A business will not be allowed to charge any post-purchase fees for things like account keeping or balance enquiries but overseas transaction fees, booking fees or fees to replace a lost, stolen or damaged card may still apply. Businesses will also be able to continue to charge an upfront fee to purchase the card.
Flexibility but risk of lost value
Consumers will get more flexibility from the elimination of expiry dates, but the lack of urgency to use their gift cards makes it more likely that the cards may be lost or forgotten. When a retailer goes into liquidation, the outstanding gift cards may not be honoured.
Heavy fines for non-compliance
Businesses that contravene the legislation could face fines of up to $30,000 and individuals could face fines of up to $6,000.
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Please note that this article has been prepared by Margaret Miller, partner of Bell Legal Group, for information purposes only. It is not legal advice nor should it be relied upon as such.