20th Nov 2018
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Knowing your rights regarding gift cards
Author: Ben Hocking
Knowing your gift card rights

There is no worse feeling than finding an expired gift card in your wallet or purse, but can you do anything about it?

If a business uses vouchers and gift cards, it is providing consumers with a ‘non-cash payment facility’.

The Australian Securities and Investments Commission (ASIC) has set requirements for vouchers and gift cards, based on the Corporations Act 2001.

Vouchers and gift cards:

  • must clearly display the expiry date. This includes the activation expiry date for cards that need to be activated before use
  • can be used more than once
  • cannot be reloaded (the value cannot be increased or added to)
  • cannot be redeemed for cash unless there is a remaining amount that, in the business' reasonable opinion, cannot be conveniently used.

Unfortunately, a business is not obliged to honour a gift card or voucher after the expiry date, unless otherwise negotiated.

If the gift card or voucher does not have an expiry date (including an activation expiry date), the consumer may use it for a reasonable length of time after it was originally purchased.

This may soon be a thing of the past. There is legislation in the pipeline to ensure everyone has at least three years to use gift cards before they expire, with businesses failing to comply with the new standard risking a fine of up to $30,000.

What happens when the business changes owners?
The new owner must honour existing gift cards and vouchers if the business was:

  • sold as a ‘going concern’ (the assets and liabilities of the business were sold by the previous owner to the new owner)
  • previously owned by a company rather than an individual, and the new owner purchased the shares in the company.

If the new owner of the business refuses to honour the gift card, consumers can make an official complaint.

If the business was liquidated and the new owner only purchased the assets of the business, then the new owner has no obligation to honour existing gift cards and the gift card holder would become an ‘unsecured creditor’ of the previous company.

Do you support the moves to extend the expiration dates on gift cards? Do you buy gift cards for friends and families? Or do you prefer to find more personal presents?

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    COMMENTS

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    Old Geezer
    21st Nov 2018
    10:43am
    No interest in them unless they are given to me for work done or I can buy then at a big discount and can use them.
    On the Ball
    21st Nov 2018
    2:12pm
    I cannot understand any company not saying they will honour them forever.
    After all, inflation is working in their favour....
    So yes, certainly 3 years is a good idea. More would be better.

    But gift cards as a good idea? Nah... A cop out. (Unless the receiver specifically asks for one to buy a particular item, then paying for that item for them is a much more personal way of gifting.
    Watch the faces of relatives when they get a gift card (they weren't expecting).
    Compare that to a gift you have thought about, added your personality to the decision.
    And if you "dont know what to get them", you dont know them!
    Old Geezer
    21st Nov 2018
    2:34pm
    I don't buy gifts or gift cards.
    Paddington
    21st Nov 2018
    4:12pm
    OG, sad!
    robmur
    21st Nov 2018
    4:06pm
    A very much needed change. Three years is OK. but would, like Bunnings, have no expiry date.
    ChristineS
    21st Nov 2018
    4:31pm
    About 8 years ago, my mother bought me a Crossroads clothing voucher for my birthday. I don't "shop" much, so when I went in to use it (about 10 days after the expiry date, lasted 1 year) the assistant declined to accept it. I have never been into a Crossroads store since. Makes me feel better but they wouldn't know or care. I would never buy vouchers now if they have an expiry date. As On THe Ball says, it's better to buy a gift, unless recipient specifically asks for a voucher.


    Tags: finance, money, gifts,

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