Fe Prindiville from Consumer Protection joins Bec in the studio. Today we’re going to talk about the new national gift card rules to come into effect on 1 November.
New national gift card rules around expiry dates and post-purchase fees and charges start on 1 November 2019. With the exception of a few limited use gift cards and vouchers, all gift cards bought from 1 November 2019 will automatically come with a minimum three-year expiry period, with the expiry date clearly marked on the card.
Even if a trader states an earlier expiry date, it will be invalid and purchasers will be entitled to the mandatory three-year period.
How will this affect traders?
It will be illegal for traders to charge post-purchase fees or administration charges that will reduce the value of the gift card, such as activation, account keeping and balance enquiry fees.
Traders will, however, be able to charge fees they would normally charge as part of a transaction, such as overseas transaction fees, booking fees, payment surcharges that reflect the costs of using the payment method, or fees charged to replace a lost, stolen or damaged card. They will also be able to charge an upfront fee for the purchase of the gift card. Whether the purchaser chooses to accept that fee and proceed with the purchase will be up to them.
There are some exceptions to the new rules, such as cards sold for a good or service at a genuine discount, and cards or vouchers given to customers as part of a limited promotion.
Why is this change happening?
To help prevent monetary losses and to make gift cards fairer for consumers. Unfortunately, an estimated $70 million is lost each year due to uncertainty about expiry dates. Consumer Protection Western Australia received 116 gift card related complaints in the last year (September 2018 – September 2019) with 26% of complaints about the inability to redeem a gift card and 14% of complaints regarding issues with the expiry date.
The changes aim to ensure gift card buyers and receivers have the confidence that the gift card can be used for a reasonable period of time.
How will this change affect consumers?
Most gift cards and vouchers sold from 1 November 2019 will come with a minimum three-year expiry period and there will be no card management fees after purchase. Spend it now or spend it later – it is the buyer’s choice. Most gift cards and vouchers now come with a minimum three-year period. New laws mean the gift cards you give or receive last longer and go further.
How will this change affect businesses?
Traders who sell gift cards or vouchers need to check their business is ready for changes to expiry dates and fees that start on 1 November 2019.
From the 1st of November, expiry information must be clearly displayed on gift cards and vouchers. Businesses need to know the new laws and their responsibilities around gift cards. As the national changes to gift card laws start on 1 November 2019, from that date, stores should only be selling cards that have a minimum three-year expiry period.
The new laws ban post-purchase administration fees on gift cards and vouchers. Businesses need to check they are complying with the changes.
What happens next?
A national education campaign will raise consumer and business awareness about changes to laws around gift cards.
For more information on the changes, including a full list of exceptions, see here.
If you’re in Western Australia and you’re having issues when it comes to redeeming a gift card, come to Consumer Protection WA for assistance. Call 1300 30 40 54 or email [email protected].
Our proactive inspectors in metropolitan Perth and our Senior Regional Officers will visit local retailers to hand out new Customer Notices produced by Australian Consumer Law regulators to advise gift card customers of their new rights.