There are many who consider a gift card / voucher to be a more thoughtful present than “cash in a card”. However, most gift recipients would agree that using that beauty treatment voucher requires greater thought and organisation than spending the money that grandma enclosed with the birthday card. Too often we thank someone for the gift card, and place the gift card in safe keeping (or misplace it), only to realise that the gift card has expired by the time we remember about it or find it in the bottom drawer of our desk.
Fortunately for recipients of gift cards in Victoria, the Treasury Laws Amendment (Gift Cards) Act 2018 (Cth) was enacted on 25 October 2018 (“Amendment Act”). The Amendment Act amends the Australian Consumer Law as set out in Schedule 2 to the Competition and Consumer Act 2010 (Cth) to introduce new requirements concerning the sale and use of gift cards. Those requirements are largely consistent with those that currently apply in New South Wales.
The new requirements under the Australian Consumer Law will apply to gift cards supplied on or after 1 November 2019.
The term “gift card” is defined broadly as a physical or electronic article that is of a kind commonly known as a gift card or gift voucher, and is redeemable for goods or services.
New section 99B of the Australian Consumer Law prohibits a person from supplying, in trade or commerce, a gift card to a consumer that expires earlier than three years after the day the gift card is supplied (“Purchase Date”). If a gift card sold to a consumer expires before the mandatory expiry date, then the gift card will be deemed to expire three years after the Purchase Date.
Pursuant to new section 99C of the Australian Consumer Law, any gift card sold to a consumer must feature one of the following items prominently:
- the date the gift card ceases to be redeemable;
- the month and the year the gift card ceases to be redeemable;
- the date the gift card is supplied and a statement that identifies the period during which the gift card is redeemable;
- the month and the year the gift card is supplied and a statement that identifies the period during which the gift card is redeemable;
- the words “no expiry date” or words to that effect.
Furthermore, a person is prohibited from supplying a gift card to a consumer on terms or conditions that require the payment of a fee or charge after it is supplied to a consumer (defined as a “post-supply fee”), or demanding or receiving payment of a post-supply fee in relation to a gift card (see new sections 99D and 99E respectively).
Any term or condition that seeks to reduce the period during which a gift card may be redeemed to less than three years after the Purchase Date, or that requires the payment of a post-supply fee in relation to a gift card, will be void pursuant to new section 99F. The supplier of a gift card must ensure that its terms or conditions do not include a term or condition that would be void pursuant to that provision.
A contravention of any of the requirements discussed above is an offence under the Australian Consumer Law, and the contravening party may be fined $30,000 in the case of a body corporate, or $6,000 in the case of a person who is not a body corporate.
The amendments include the ability to make regulations to exempt certain types of gift cards, certain persons, and / or particular circumstances from the application of the new requirements under the Australian Consumer Law.
It has been suggested that exemptions similar to those in New South Wales will be created under the regulations. The gift cards excluded from from the scope of the NSW legislation include:
- a gift card or voucher that is given by a business for free to a consumer;
- a gift card or voucher exchanged for goods returned to the supplier of the goods;
- a gift card supplied as part of a customer loyalty or employee rewards program;
- a gift card or voucher supplied as part of a temporary marketing promotion as a bonus to the purchase of a good or service;
- a gift card or voucher for a good or service available for a limited time, where the gift card’s expiry date corresponds to the date on which the good or service ceases to be available.
What should businesses do?
Before 1 November 2019, businesses should:
- familiarise themselves with the new requirements for gift cards under the Australian Consumer Law;
- review their existing terms or conditions in relation to gift cards, and make all necessary changes to those terms or conditions; and
- make any necessary changes to the content of their gift cards,
to ensure that any gift card sold on and from 1 November 2019 complies with the Australian Consumer Law as amended by the Amendment Act.
In order to comply with the current requirements of the Australian Competition and Consumer Commission, businesses should also ensure that their existing terms or conditions clearly set out all conditions and restrictions on how the gift card may be used, the expiry date of the gift card, including the activation expiry date for cards that need to be activated, any limitation on the number of transactions, and whether or not the card can be reloaded or topped up.