Laws applying to gift vouchers and gift cards
Gift cards and the Australian Consumer Law
The Australian Consumer Law (ACL) was amended in 2019 to provide additional protections for consumers regarding gift cards.
From 1 November 2019, gift cards and vouchers must be sold with a minimum three year expiry period and must clearly show the expiry date. If the card has an earlier expiry date written on it and is sold after this date, consumers will still get the mandatory three-year period.
Gift cards and vouchers are not covered by the three-year period if they:
- are sold for a good or service at a genuine discount
- are given to customers in a limited promotion (for example: valid in-store today)
- were sold before 1 November 2019 (the expiry date at the time of purchase will apply).
Businesses cannot charge post-purchase or administration fees that reduce the value of the gift card. These include activation, account keeping and balance enquiry fees. However, businesses can still charge other fees to cover the cost of processing a payment such as fees for payment by credit card, replacing a lost or damaged card or overseas transactions fees.
There are penalties for a breach of these laws so if you suspect that a business is not complying with these requirements you can contact us by following the steps in our Resolve your problem or complaint section.
Australian Securities and Investments Commission requirements
If a business does not comply with these requirements, it cannot rely on ASIC’s exemption and must follow the more extensive requirements for non-cash payment facilities (such as licensing requirements) listed in the Corporations Act 2001. For more information, visit ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 on the Federal Register of Legislation website.
If you think a gift card does not meet the requirements of ASIC’s exemption (such as disclosure of the expiry date), you can lodge a complaint with ASIC about non-compliant gift cards via:
Consumers can lodge a complaint with ASIC about non-compliant gift cards via:
Using a gift voucher or gift card after the expiry date
A business is not obliged to honour a gift card or voucher after the expiry date, unless otherwise negotiated.
Using a gift voucher or gift card that does not display an expiry date
If the gift card or voucher does not have an expiry date (including an activation expiry date), the consumer may use it for a reasonable length of time after it was originally purchased.
As it is a requirement of ASIC’s licencing exemptions for a gift card to display an expiry date, you may wish to lodge a complaint with ASIC, as above, if a gift does not display an expiry date. However, as it is also a requirement to display an expiry date under the ACL, you may also view our Resolve your problem or complaint section.
Using a gift card or voucher when the business changes owners
The new owner must honour existing gift cards and vouchers if the business was:
- sold as a ‘going concern’ (i.e. the assets and liabilities of the business were sold by the previous owner to the new owner)
- previously owned by a company rather than an individual, and the new owner purchased the shares in the company.
If the new owner refuses to honour a gift card or voucher in these circumstances, consumers can contact us, or make a complaint.
If the company operating the business has been liquidated, the new owner may have only purchased the assets of the business and is not obliged to honour existing gift cards or vouchers. In this situation, the consumer becomes an ‘unsecured creditor’ of the previous company. For more information, view our Insolvency page.
Promotional vouchers and discount coupons
A business may offer discounts or free entitlements through a book of coupons or vouchers – provided consumers know exactly what they are purchasing.
Under the Australian Consumer Law and Fair Trading Act 2012, the supplier cannot mislead consumers about the nature, characteristics, suitability for purpose, and quantity of goods or services.
The supplier cannot leave out information – for example, failing to disclose that a ‘free’ offer is actually conditional on another purchase.
If the book costs more than $100, the supplier (usually a telemarketer) must give you a written contract, including a cooling-off period. For more information, view Telemarketing.
Note: free voucher books are still subject to the Australian Consumer Law and Fair Trading Act 2012, as there is a direct link to trading.
Tips about voucher books
To judge the value offered by a voucher book, consider:
- How many coupons must the consumer use before recouping what they spent on the book?
- Which businesses are involved? Where are they located?
- How do consumers know the businesses will honour the coupons as the telemarketer says?
- Can consumers be confident the businesses will still exist by the time they get around to using their coupons?
- What conditions apply?
- Are there restrictions on when coupons can be used (for example, only ‘off-peak’), or expiry dates?
- Are ‘free’ offers actually free of charge, or ‘buy one get one free’?