Laws applying to gift vouchers and gift cards
If a business uses vouchers and gift cards, it is providing consumers with a ‘non-cash payment facility’.
From 1 November 2019, all gift cards and vouchers sold must be valid for at least three years. The expiry date must be clearly shown. If the card has an earlier expiry date written on it, 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. Businesses can still charge other costs, such as fees for overseas transactions, payment by credit card, or replacing a lost or damaged card.
The Australian Securities and Investments Commission (ASIC) has set requirements for vouchers and gift cards, based on the Corporations Act 2001.
Vouchers and gift cards:
- must clearly display the expiry date. This includes the activation expiry date for cards that need to be activated before use
- can be used more than once
- cannot be reloaded (i.e. the value cannot be increased or added to)
- cannot be redeemed for cash unless there is a remaining amount that, in the business' reasonable opinion, cannot be conveniently used.
If a business does not comply with these requirements, it must follow the more extensive requirements for non-cash payments 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.
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.
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.
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 our Telemarketing page.
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’?
Where to next: