Australians shopping for gift cards ahead of the festive season will have extra protection against losing millions of dollars on expired cards.
The Australian Consumer Law has been amended to introduce a national regime that requires gift cards have a fixed expiry period, clear information of the expiry date on the card and the banning of certain fees. The new law took effect on 1 November.
Gerard Brody, chief executive of Consumer Action Law Centre, says expired gift cards are a huge problem, costing consumers millions of dollars every year.
Each year Australians purchase 34 million gift cards with a value of around $2.5 billion. However, it is estimated that close to $70 million is lost each year to unused gift cards that have expired.
The three changes are that all gift cards now must have a minimum three-year expiry period; and the period of validity must be set out prominently on the gift card itself – for example, “Supply date: December 2019. This card will expire in 3 years,” or “Valid for 3 years from 12/19”.
In addition, administration fees that are charged after the purchase of the gift card for things like costs to activate the card or checking the balance are now banned.
The new rules will apply to all gift cards issued on or after 1 November.
A penalty may be imposed if these requirements are not adhered to and the Australian Competition & Consumer Commission now has access to a range of remedies and the ability to impose infringement notices.
The Financial Planning Association of Australia report, Gifts that Give, reveals that gift cards along with cash are the most popular gifts given at Christmas time.
Fair Trading New South Wales recommends that consumers check the expiry date when receiving a gift card and if the date is not printed then to ask the sales attendant to write it on there.
In addition, consumers are advised to treat gift cards like cash as most retailers will not replace the card if it is lost or stolen.
