News

A gift for consumers in time for Christmas

November 5th, 2019

With the holiday season quickly approaching, legislation extending the expiry period on gift cards to a minimum of three years provides a welcome gift for consumers across Australia.

The changes will come into effect on 1 November 2019, and as a result, new obligations will be imposed on businesses that supply gift cards (see below implications for businesses).

The key changes are that:

the expiry date must be a minimum of three years;
the expiry date must be clearly displayed on the gift card; and
a majority of ‘post purchase fees’ are banned including activation and account keeping fees.

The expiry date must be displayed as a full date or as a period of time with the date of supply e.g. ‘this card expires 5 years after supply, supply date 01/11/2019” or “valid for 3 years from 11/19″.

These changes will come in force on 1 November 2019 and if the terms and conditions of a gift card purchased on that date do not comply with the new requirements, the terms and conditions will be voided and the new requirements automatically imposed by law.

Cards and vouchers sold before 1 November 2019 will continue to have the same expiry period and applicable fees as stated at the time of purchase.

The three year expiry period does not apply to a number of gift cards or vouchers that are:

able to be reloaded or topped up;
for goods or services available for a limited time (e.g. for a temporary pop up art exhibition);
supplied as part of a temporary marketing promotion (e.g. a voucher valid for one month supplied as a free bonus with a purchase);
donated free of charge for promotional purposes (e.g. a voucher supplied on the opening day of a store to be spent on that day);
sold for a particular good or service at a genuine discount (e.g. a $50.00 voucher for a service worth $100.00);
part of an employee reward scheme;
part of a customer loyalty program; or
second-hand gift cards.

Implications for businesses

To ensure that businesses comply with these new gift card laws, the Australian Consumer Law Commission recommends that businesses should:

update gift card terms and conditions on the cards themselves, any promotional material and websites;
update internal systems, training, manuals and policies;
place signage on gift card displays and at the counter; and
note the changes on the receipt issued with the purchase of a gift card.

Penalties

There are substantial fines for non-compliance of up to $6,000.00 for individuals and $30,000.00 for businesses and companies.

If you have any doubt about your compliance obligations, or whether these new laws will apply to you, please do not hesitate to contact our experienced team on 07 4036 9700.

Happy holiday shopping!