Many of us received at least one gift card at Christmas.
It is May and many of us have either only used part of the value of the card, haven’t found something to buy yet or have forgotten about it all together. IT is not uncommon that by the time you think of something to buy with the card or remember it is sitting in your wallet, it has expired.
This is not helped by the inconsistency of expiry periods between different types of gift cards, with expiry times often varying between six and 12 months.
Some companies have recognised the large amount of unredeemed expired gift cards and, in response, have removed expiry dates.
With people spending $1.5 billion annually, according to a report conducted by the Commonwealth Consumer Affairs Advisory Council, it is not a surprise that the industry has come under greater government scrutiny.
The federal government has made changes to Australian consumer law to address some of the issues consumers face with gift cards. These take effect for all gift cards bought on or after November 1, 2019 and include changes that mandate minimum three year expiry periods for gift cards, as well as requiring gift cards to display expiry dates.
In anticipation of this, SA has amended the Fair Trading Act 1987 to require a minimum three-year expiry on gift cards bought on or after December 10, 2018. This excludes gift cards bought from an address outside SA. Some cards, such as prepaid cards, loyalty cards and cards that are redeemable only for a particular good or service, do not fall within this three year minimum expiry.
If a SA retailer supplies a gift card expiry date of less than three years, they could face a penalty of up to $5000.
SA gift cards bought before December 10, 2018 do not have to abide by the three year expiry minimum and Australia-wide rules to not come into force until November 1, 2019. It is therefor important in the meantime to check the expiry date.
This article was written by Anthony Kelly and was published in the Stock Journal on 9 May 2019.
Practice Area: Corporate, Commercial & Business