Imagine happening upon a $200 gift card from Christmas only to discover that you missed the expiration date by one day!
You enter the store and are faced with a smug sales assistant who refuses to redeem your card. The store retains your $200 credit without providing any goods or services in return. Unfortunately, it’s a scenario that plays out every day at thousands of retailers around the country. Australians spend approximately $2.5 billion on gift cards and lose $200 million on unredeemed gift cards each year.
So what are your rights under Australian consumer law?
Gift card expiration periods range from between 3 months to 24 months.
Most expire within 12 months, with the exception of gift vouchers from retailers such as Apple and Bunnings which have no expiry date.
NSW gift card reforms
In NSW alone, it is estimated that $60 million a year is lost on unredeemed gift cards.
Over a period of 5 years, NSW Fair Trading received over 1300 complaints, sparking calls for gift card reform. In October 2017, NSW Parliament passed amendments to the Fair Trading Act 1987 (NSW), introducing a mandatory minimum expiration period of 3 years.
This means that from 31 March 2018:
Most gift cards and gift vouchers bought in NSW will have a mandatory minimum expiry period of 3 years.
In NSW there is also now a ban on charging any post-purchase fees when redeeming a gift card which would reduce its value, including account-keeping fees and activation fees.
Tom Godfrey, Head of Media at consumer advocacy group, CHOICE, welcomed the reforms:
These reforms have been a long time coming and are a big win for NSW consumers … we hope it signals the beginning of the end of retailers cashing in at our expense”
NSW is currently the only state in Australia to introduce such reforms, which align with countries such as the United States, Canada and the United Kingdom.
Where does gift voucher cash go after the expiration date elapses?
Unfortunately, your cash reverts back to the store.
The retailer profits without providing any goods or services for which the voucher was purchased.
Can you challenge a store to honour your gift voucher?
Generally, businesses are not required to honour gift cards after the expiration date elapses.
You do, however, have a few options:
Ask to speak to the Store Manager.
Calmly and courteously discuss an arrangement that involves redeeming the gift card by a specific date. This might be on the date that you are at the store or at a later date. Managers are often flexible and may try to accommodate honouring your gift card not only as a sign of good faith but also to retain your business in the future.
If Option 1 is unsuccessful, you may wish to make a complaint to the Head Office of that specific retailer.
You can do this by phone or in writing.
Retain a copy of your correspondence or, if you are making a complaint by phone, request a reference number for your call. You can use this information as evidence if you choose to take things further.
Make a complaint to your State or Territory Consumer Protection Agency such as Consumer Affairs or Fair Trading.
Contact the Australian Competition and Consumer Commission (ACCC). The ACCC is the competition and consumer regulator and deals with a range of consumer complaints.
Depending on the nature of your complaint, if it remains unresolved, you may be entitled to take your complaint to your State or Territory Small Claims Tribunal.
If you have explored all the above options, you may wish to consider seeking independent legal advice about what options are available to suit your circumstances.
Time for nation-wide reform
While the recent legislative changes to gift voucher expiration periods are a welcome protection for NSW based consumers, it is about time that other Australian jurisdictions make comparable reforms.
Unfair gift voucher expiration periods and hidden fees generate millions of dollars of passive revenue for large corporations at the cost and prejudice to Australian consumers.
These cards are a gift horse for retailers who can take advantage of inflation, changes in value and low redemption rates. The least these companies can do is offer a product that’s fair, including a minimum expiry with no sneaky fees, says Tom Godfrey.
What do you think? Would you like to see gift voucher reforms in your State or Territory? Let us know in the comments!