What are your rights as a consumer buying gift cards this Christmas?
Earlier this year, the consumer protection laws regarding gift cards were amended to ensure that all gift cards redeemable in NSW did not carry unfair terms and conditions. The introduction of the Fair Trading Amendment (Ticket Scalping and Gift Cards) Act 2017 (NSW) (the “Act”), mandates a minimum expiry date of three years to most gift cards sold to consumers in NSW. The law also prohibits any post-purchase fees connected to redeeming the gift voucher that would depreciate its value.
Mandatory minimum expiry date of 3 years
The Act received royal assent on 31 March 2018, therefore gift cards sold before that date are not subject to the new laws. The mandatory three year expiry date is effective from the date the card is issued to the consumer. Any gift cards sold after 31 March 2018 will be void if they do not meet the requirements of the Act.
A gift card is defined in the Act as ‘a card or voucher (in hard copy or electronic form) that is redeemable for goods or services in NSW.’
It is important to note that the Act currently only applies where the gift card is redeemable in NSW. For example, if a card is purchased in NSW for a clothing store that only operates in VIC, the Act will not be applicable. Until the Commonwealth’s uniform legislation (explained in further detail below) commences, retailers who operate in various states including NSW may have different expiry period dates and it is important for consumers to be aware of the terms and conditions when redeeming the gift card depending on the state.
Ban on post-purchase fees
The legislation also introduces a ban on post-purchase fees associated with gift cards, such as balance enquires, account keeping and activation fees. Notably, costs connected to overseas transactions, booking fees and payment surcharges are not banned.
What are the exemptions?
The exceptions that are not captured by the Act include:
- Gift vouchers given in substitution for returned goods;
- Prepaid vouchers for phone credit or internet access;
- Debit, credit or prepaid travel cards; and
- Cards given to customers as part of a loyalty program.
New Federal Laws relating to gift cards
Following the NSW reforms, the Federal Government passed the Treasury Laws Amendment (Gift Cards) Bill 2018 (Cth) (the “Bill”) on 18 October 2018. The Bill amends the Australian Consumer Law, introducing a unified national framework to provide certainty and protection for consumers and will commence on 1 November 2019. The Bill gained support from all States and Territories, with the Queensland Attorney-General Yvette D’Ath publically advocating for the reforms stating:
‘gift cards are popular presents at Christmas time – whether you are naughty or nice. So let’s make sure those who receive them can actually use them, and the cards don’t turn into a lump of coal.’
What to expect from the Federal new laws
Similar to the NSW reforms, the Bill’s amendments to the Australian Consumer Law extend the expiry date of gift cards to a mandatory minimum period of 3 years. It also introduces rules to guarantee that the expiry date is noticeably displayed on the card and prohibits post-supply fees.
Important Disclaimer: The content of this publication is general in nature and for reference purposes only. It is current at the date of publication. It does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.