Losing money on gift cards with surprise expiry dates or hidden fees may become a thing of the past, with the government considering reforms to national legislation.
According to the Treasury, Australians lose approximately $70 million of value on expired gift cards every year. Post-purchase fees can also erode the balance on a gift card over time, and function as a de facto expiry date.
RateCity research from 2017 found that the most common expiry date for a gift card was only 12 months, with some cards offering as little as three months to make a purchase.
The Treasury is presently seeking public consultation on the Competition and Consumer Amendment (Gift Cards) Bill 2018, which is set to:
- Mandate minimum three year expiry dates for gift cards;
- Require gift cards to display expiry dates; and
- Ban post-purchase fees on gift cards.
While some state governments (South Australia and New South Wales) have already taken steps to put similar regulations into effect, the proposed reforms at Commonwealth level may help provide national consistency for gift card regulation.
The Australian Competition and Consumer Commission (ACCC) would have the power to enforce these new rules. Penalties for breaching these conditions could be as high as $30,000 for businesses and up to $6000 for individuals.
Submissions to the Treasury regarding these proposed changes close on 9 August 2018. If adopted, the reforms will commence on 1 November 2019, with the intention of providing businesses with sufficient time to adjust while also introducing important protections for consumers in time for the 2019 Christmas period.