New federal gift card regulations

Ever find a gift card in your wallet from last Christmas, only to find out it’s already expired? The Federal Government is introducing new regulations that will make the rules relating to gift cards more consumer friendly.  Back in June this year, we reported on the changes to requirements for gift cards sold in NSW, which is available here.

The newly released draft regulations and explanatory statement are contained in the Competition and Consumer Amendment (Gift Cards) Bill 2018 (Cth) (the Gift Cards Bill), which was undergoing  public consultation until the end of October.

The Gift Cards Bill introduces three key requirements, including that gift cards must:

  1. Last for a minimum of three years before expiry;
  2. Prominently display the expiry date on the card; and
  3. Ban post-supply fees, such as fees charged for administrative support for the operation of a gift card.

What happens if you have already received the gift card?

Unfortunately, if you have already received the gift card the old rules will apply. Under the proposed regulations, pre-owned gift-cards sold as second hand goods (i.e. if supplied to consumers before the Act takes effect on 1 November 2019) are exempt from all requirements under the Gift Cards Bill.

Exemptions

If you are a retailer, note that there are numerous exemptions under the Gift Cards Bill in relation to the minimum three-year expiry period,  including:

  • Gift cards that are supplied or redeemable for goods or services that are only available for a limited period of time;
  • Gift cards supplied to a purchaser of goods or services in connection with that purchase as part of a temporary marketing promotion;
  • Gift cards that are only redeemable for particular goods or services that are supplied at a genuine discount on the market value;
  • Gift cards supplied to local, state or federal government agencies or authorities;
  • Gift cards supplied to an entity registered under the Australian Charities and Not-for-profit Commission Act 2012 (Cth) as having a purpose of advancing social or public welfare;
  • Gift cards supplied as part of an employee reward scheme; and
  • Gift cards donated by the supplier for a promotional purpose.

Finally, under the draft regulations, permitted post-supply fees will include fees for:

  • Making a booking;
  • Disputing a transaction;
  • Reissuing a lost, stolen or damaged card;
  • Foreign currency transactions; and
  • Payment surcharges.

This blog was co-authored by Josephine Gardiner, Jessie Buchan and Melinda Upton.