13 Feb Gift card laws updated in New South Wales
The Fair Trading is introducing new gift card laws that will only apply in NSW. We recommend you review your current terms and conditions.
There’s no doubt that gift cards are good for business. They enhance customer loyalty and encourage repeat business. And with Christmas upon us, they’re a great option for the uninspired gift-giver. However, retailers need to be aware of new gift card laws that were recently passed by NSW Parliament requiring a mandatory 3-year expiry date on all gift cards sold in New South Wales.
Gift cards are typically issued with a 12-month expiry date. At the moment, retailers are not obligated to honour gift cards after the expiry date, unless done so in good faith.
It is estimated that consumers in New South Wales lose $60 million a year on unused expired gift cards. As a nation, it is believed that Australians are throwing away $200 million a year in unredeemed gift cards.
The push for new laws was led by consumer advocacy group CHOICE and the minister for Innovation and Better Regulation, Matt Keen.
The Fair Trading Amendment (Ticket Scalping and Gift Cards) Bill 2017 is set to be introduced early next year. It will prohibit retailers from issuing to consumers a gift card with an expiry date of less than 3 years. Retailers will also be prohibited from charging any fees after the sale of the card that will reduce the value of the card.
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Interestingly, new laws will only apply in New South Wales. If someone purchasing a gift card has an interstate or overseas contact address or asks for the gift card to be delivered outside New South Wales, then it is deemed that the card has not been sold to a consumer in New South Wales and the laws will not apply.
The new gift card laws also won’t apply to:
- cards that are offered in substitution for returned goods;
- prepaid cards or vouchers redeemable for telecommunications credit (i.e. prepaid phone/internet);
- debit cards, credit cards, prepaid travel cards or any similar product supplied by a financial institution;
- cards or vouchers supplied as part of a customer loyalty program.
The changes will only apply to gift cards sold after the commencement of the laws. The penalty for non-compliance with the 3-year expiry date is a fine of $550 from the NSW Office of Fair Trading. The maximum penalty for breach of the new gift card laws is a fine of $5,500. In addition, a customer may take private action if they feel it is worthwhile.
At this stage, it’s not clear when the new gift card laws changes will come into effect. However it is expected to be early next year. We strongly recommend you review your current terms and conditions so that you’re not caught out.
If you need assistance reviewing and updating your terms or simply want to find out what this means for your business, then get in touch and book in a strategy call here.
Contact us today if you require any assistance with Commercial legal advice or documents.
(c) Progressive Legal Pty Ltd – All legal rights reserved (2020)
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Ian Aldridge is the Founder and Principal Lawyer Director at Progressive Legal. He has over 15 years experience in advising businesses in Australia and the UK. After practising in commercial litigation for 12 years in major Australian and International Law Firms, he decided to set up a NewLaw law firm in Australia and assist growing Australian businesses. Since then, he has advised over 2,500 small businesses over the past 6 years alone in relation to Intellectual Property Law, Commercial, Dispute Resolution, Workplace and Privacy Law. He has strived to build a law firm that takes a different approach to providing legal services. A truly client-focused law firm, Ian has built Progressive Legal that strives to deliver on predictable costs, excellent communication and care for his clients. As a legal pioneer, Ian has truly changed the way legal services are being provided in Australia, by building Legal Shield™, a legal subscription to obtain tailored legal documents and advice in a front-loaded retainer package, a world-first. He has a double degree in Law (Hons) and Economics (with a marketing major). He was admitted to the Supreme Court of NSW in 2005.
