As of 31 March 2018 the NSW Government has made changes to the Fair Trading Act 1987 so that there is now a minimum expiry period of 3 years for all gift cards and vouchers sold to consumers within NSW. There is also a ban on charging post-purchase fees for using the voucher that reduce the vouchers value including activation fees or no balance enquiry fees. These changes do not apply to gift cards and vouchers sold before 31 March 2018.
Who will these reforms affect?
These reforms apply to both large and small businesses as suppliers of gift cards for use in their own business. The only exceptions are businesses as suppliers providing the following types of gift cards:
* Gift cards or vouchers given by a business to use in that business to a consumer for free;
* Gift cards or vouchers sold or donated by a business to a fundraising appeal;
* Prepaid cards for services such as phone credit or internet access;
* A gift card or voucher given to a consumer in exchange for returning goods to the supplier (i.e. credit notes); and
* Gift cards or vouchers supplied by a business as part of a temporary marketing program as a bonus to the purchase of a good or service.
Online gift card purchases
Gift cards sold online are covered if the customer is in NSW at the time of the sale or provides a NSW address in connection to the sale. Therefore, if the gift card is sold to a customer with an address outside of NSW the gift card may not require the 3-year expiry date.
However, the business must be certain that the customer resides outside of NSW and be able to prove this, so unless the business is confident of this Fair Trading suggests it may be safer to assume the customer is located within NSW and that the reforms apply to the gift card.
Is there a transition period?
There is a transition period for these reforms beginning 31 March 2018 and ending 30 September 2018. During this phase, businesses can run down their existing stock of pre-printed gift cards but must take steps to inform customers that a 3-year expiry applies to gift cards and vouchers sold after 31 March 2018. For example, a business may try to strike out the incorrect expiry date on the gift card, insert the correct one and provide the customer with written information about the new terms of the gift card.
For more information on these reforms and how they may affect your business visit the Fair Trading NSW website by clicking here.
For further information Contact Coutts today.