Gift Cards can be the perfect gift to give when you want to give the gift of choice. We discuss the Australian gift card legal requirements and some changes that you need to know about.
What are gift cards or gift vouchers?
A gift card (or gift voucher) is normally loaded with a prepaid amount of cash that enables a recipient of the gift card to exchange it for their own choice of goods or services to the value of the amount loaded onto the card.
The statistics in Australia
The Gift Cards in the Australian Market Report found that the size of the Australian gift card market was between $1.5 billion and $2.5 billion annually.
Research by finder.com.au found that over a 12 month period in 2017 to 2018, $148 million was wasted in unused gift cards, with Queenslanders wasting the most with $50.3 million wasted.
What are the existing Australian gift card legal requirements?
To ensure that consumers are not misled, businesses selling gift cards should clearly state:
- all conditions and restrictions on how the recipient can use the gift card;
- the expiry date;
- the limitation on the number of transactions (if any); and
- whether or not the gift card can be reloaded or topped up.
Gift cards cannot usually be exchanged for cash and can no longer be used after their expiry date has passed. Many gift cards currently in circulation in Queensland have a one to two year expiry date which is set by the retailer.
States such as New South Wales and South Australia have in the past year brought in legislation to set three year minimum validity periods for gift cards sold to consumers based in those states.
What are the new legal requirements for gift cards?
Changes to the national laws will take effect in respect to many gift cards (there are some exceptions) supplied on or after 1 November 2019. The changes include:
- a minimum validity period of three years. If any terms or conditions seek to reduce the validity period, they will be void and the expiry date will be taken to be three years from the date of supply.
- Gift cards must prominently display the expiry period or display the words ‘no expiry date’ or words to that effect.
- Most post-supply fees are prohibited.
What are the penalties for non-compliance?
Fines of $30,000 for a corporation or $6,000 for an individual may be issued in respect of a breach of each new provision of the legislation.
As a retailer, what should I do now?
Retailers should take steps now to ensure that they are ready for the changes when they take effect. Most gift vouchers sold Australia wide this Christmas period will need to comply with the new requirements. Contact us to review your gift card or gift voucher policies and terms and conditions.