The federal government has followed through on its promise to scrutinise Australia’s gift card requirements and expiry dates, revealing draft legislation yesterday to impose minimum three-year expiry dates for all gift cards sold in Australia.
The exposure draft for the new Competition and Consumer Amendment (Gift Cards) Bill 2018 shows the new laws would be largely similar to those already enacted in New South Wales and South Australia.
The proposed legislation would also introduce rules to ensure expiry dates are prominently displayed on the cards. “The expiry date must be set out prominently on the gift card itself. Displaying the expiry period on a separate document at the point of sale is not sufficient”, reads the draft legislation.
Under the proposed legislation, if gift cards do not specify a certain date on their expiry, the date must be the last day of the month. Gift cards would also not be allowed to have any post-purchase or post-supply fees, as they “erode the balance on a gift card over time and operate as a de facto expiry date”.
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Businesses that contravene this proposed legislation could face fines of up to $30,000, whereas individuals could face fines of up to $6,000.
The proposed legislation is currently open to consultation until August 9, at which point any recommendations will be considered and the legislation finalised. It will then proceed to Parliament, where it would likely pass with little-to-no opposition.
If so, the new national laws for gift cards would come into effect in November 2019.
Some big name retailers have already gotten on the front foot when it comes to gift cards, with Woolworths scrapping gift card expiry dates earlier this year. Experts have called for this move rather than a lengthening of expiry dates, with Professor Michael Adams, a corporate law and governance expert at the University of Western Sydney, recently saying the extensions were “not sufficient”.
“Obviously [the new rules] are better but it’s not sufficient — it does not resolve the issue,” he said in April.
“I do not think they should have an expiry date as they are purchased with cash. If the gift card is bought with cash it should be redeemed as if it was cash.
“Extending the expiry date will not solve the problem of businesses going broke and failing to honour gift cards, which was the major issue with the gift cards from Dick Smith Electronics.”