The Australian Consumer Law (ACL) has been amended to provide protections for gift card consumers across Australia. These national changes apply to gift cards supplied to consumers on or after 1 November 2019.
Cards and vouchers sold before 1 November 2019 continue to have the same expiry period and applicable fees as at the time of purchase.
Preparing for the changes
After 1 November 2019, if terms and conditions of a gift card do not comply with the reforms they will be void and the new requirements will be applied regardless of what is written on the gift card.
In readiness for the changes, businesses should:
- update gift card terms and conditions on their website and other promotional material, including on physical gift cards
- update internal systems, training and compliance manuals
- place signage on gift card displays and at the point of sale
- make note of the changes on any receipt issued when a gift card is purchased.
Fundamentals of gift card legislation
The information below relates to gift cards sold on or after 1 November 2019.
With some exclusions, the fundamentals are:
- a minimum three year expiry period for gift cards is required;
- gift cards must display expiry dates; and
- most post purchase fees on gift cards are banned.
Three-year minimum expiry period
The law requires that most gift cards or vouchers be sold with a mandatory minimum expiry period of three years. The period begins from the date a gift card is sold to a consumer. Businesses can choose to apply an expiry period longer than three years and no maximum expiry period applies.
Expiry details must displayed on cards
Gift cards must prominently display the expiry date as either the full date or as a period of time. For example:
- "Supply date: March 2020. This card will expire in 3 years".
- "This card expires 5 years after supply. Supply date 15/8/20".
- "Valid for 3 years from 11/19".
If the expiry date is shown as a period of time it must also include the date it was supplied or purchased so the expiry date can be determined.
A gift card must also state if there is no expiry date.
Ban on post-purchase fees
Once a gift card has been issued, there is a ban on charging any post-purchase fee, including:
- activation fees
- account keeping fees
- balance enquiry fees.
The ban does not cover fees that a business can charge as part of a sale to cover the cost of processing a payment. Post purchase fees do not include:
- overseas transaction fees
- booking fees
- payment surcharge fees
- fees charged for the reissue of a lost, stolen or damaged card.
Businesses are able to charge an upfront fee when a consumer purchases a gift card.
Included and excluded cards
The law applies to all gift cards or vouchers sold on or after 1 November 2019, unless specifically excluded.
The three year requirement does not apply to gift cards that are:
- able to be reloaded or topped up
- for a good or service available for a limited time where the card or voucher expires at the end of that period (e.g. entry to a concert or museum exhibition)
- supplied to a purchaser of goods or services as part of a temporary marketing promotion (e.g. a wine voucher valid for one month that is mailed to a consumer as a free bonus with a purchased item and was not part of the purchase offer)
- donated free of charge for promotional purposes (e.g. a local shopping centre has a one-day marketing promotion where each visitor to the centre on that day is handed a $20 gift card that is valid for use at any store in the centre for that day only)
- sold for a particular good or service at a genuine discount (e.g. $50 card for salon service valued at $100)
- supplied as part of an employee rewards program
- given as a bonus in connection with a purchase of a good or service for use in the same business (customer loyalty programs)
- second-hand gift cards.
- part of a temporary marketing promotion (e.g. customers buy a certain product from Business A, which provides a $50 voucher to use at Business B).
Penalties for non-compliance
A breach of the laws could attract a $30,000 fine in the case of a body corporate, or $6,000 for individuals.
In addition, the ACCC has the ability to impose infringement notices. Each infringement notice is 55 penalty units (currently $11,500) for a body corporate and 11 units (currently $2,420) for persons other than a body corporate.
If you believe a business is not complying with gift card requirements, raise your concerns with them in the first instance. If you have further queries or concerns, contact your local consumer protection agency.
Some states (NSW and SA) have local gift card laws in place, so if you have any questions about gift cards, raise them with your state or territory consumer protection agency in the first instance.
Further information can be found in the Explanatory Memorandum to the Treasury Laws Amendment (Gift Cards) Act 2018 and the Explanatory Statement to the Treasury Laws Amendment (Gift Card) Regulations 2018. The regulations set out exemptions to the arrangements and a small list of allowable post-purchase fees.