Reforms under the Fair Trading Act 1987 will make gift cards more consumer friendly by introducing a minimum three year expiry date.
Minimum three year expiry date for gift cards
From 10 December 2018, gift cards sold in South Australia (SA) will be required to have a minimum three year expiry date.
It will be an offence to sell a gift card with an expiry date less than three years from the date of sale to a consumer in SA. It will also be an offence for the seller to impose an administrative charge or fee that reduces the redeemable value of the gift card after its sale.
A six month transition period will enable businesses to implement any necessary systems or process changes and will allow existing stock to be sold.
Cards purchased prior to the commencement date
The changes do not apply to gift cards purchased before 10 December 2018.
The expiry date of gift cards purchased prior to the commencement date will remain valid.
The changes do not apply to gift cards delivered to an address outside of SA or where the contact details of the purchaser contains an address outside of SA.
Compliance with the new requirements
From 10 December 2018, businesses must not sell a gift card with an expiry date of less than three years.
However, during the six month transition period, businesses can continue to sell existing stock of gift cards that are labelled with shorter expiry dates, provided that they take appropriate measures to inform consumers about the new laws. These cards must, however, still be honoured for a minimum of three years despite any labelling that suggests otherwise.
To inform consumers about the changes, businesses should consider implementing the following measures:
- Updating terms and conditions associated with the sale of gift cards (including T&Cs on the business website or other promotional material).
- Placing signage on stands where gift cards are located and/or at point of sale.
- Handing a flyer to customers at point of sale to inform them of the changes.
- Making note of the changes on any receipt issued when a gift card is purchased.
To ensure compliance with the new requirements, businesses should:
- Sell existing stock of gift cards and card packaging labelled with expiry dates that are less than three years during the six month transition period.
- Update their operational requirements including updating IT platforms, compliance manuals and staff training.
If you believe a business is not complying with the new requirements, raise your concerns with them in the first instance. If you have further queries or concerns, you can contact Consumer and Business Services (CBS) on 131 882.
CBS will respond to consumer complaints received during the transition period, however, the compliance and enforcement approach taken by CBS during this time will focus primarily on educating businesses about their obligations under the new requirements.
In assessing whether to take disciplinary action, CBS will consider the nature and extent of the measures taken by a business to comply with and inform consumers of the new requirements.
There is a maximum penalty of $5,000 for organisations who do not comply with the minimum three year expiry date.
Exempt gift cards
The new requirements will not apply to the following types of cards:
- ATM cards, charge cards, credit cards or debit cards;
- reloadable prepaid cards such as mobile recharge cards;
- cards or vouchers redeemable only for phone credit, internet access or any other utility such as an ITunes card;
- a card or voucher supplied in substitution for goods returned to the supplier of the good, an example being a card or voucher given to a consumer when they return faulty goods;
- a card or voucher supplied as part of a customer loyalty or employee rewards program;
- a card or voucher supplied as part of a temporary marketing promotion to reward anyone who purchases particular goods or services; and
- a card or voucher redeemable only for a particular product or service that is available for a limited period such as entry to an art exhibition or a concert.