Now is the time to review your Gift Card terms and conditions

On the 9 November 2022, the Treasury Laws Amendment (More Competition, Better Prices) Bill 2022 received Royal Assent, meaning changes to the Competition & Consumer Act 2010 (Cth) (CCA) and the Australian Consumer Law (ACL) were implemented. 

The changes consisted of two components: 

1. The introduction of penalties and other changes relating to unfair contract terms;
2. Substantial increases in maximum penalties for breaches of certain provisions of the Competition and Consumer Act including the Australian Consumer Law.

In light of the new penalties and expansion of the unfair contract terms laws, now is the perfect time to review your Gift Card* terms and conditions and ensure they meet all the regulation requirements.

In 2018 the ACL was amended to introduce a national regime for the regulation of Gift Cards. This regime outlined the following requirements for Gift Cards in Australia:

• Gift Cards must be valid for a minimum of 3 years. The expiry date must be clearly shown on the card as a date or can be shown as an issue date, for example ‘This card expires 3 years from the issue date. Issue date: 15/02/23’. If the Gift Card has no expiry date then this must be clearly stated on the card.

The 3-year rule does not apply to Gift Cards that are:

• • able to be reloaded or topped up
  • donated for promotional purposes, e.g. a business handing out $15 vouchers to passers-by for its grand opening
  • available only for a specified period, e.g. performance of a visiting ballet company
  • supplied at a genuine discount, e.g. $60 card for a massage valued at $100
  • part of an employee reward scheme
  • part of a customer loyalty program
  • second-hand Gift Cards
  • part of a temporary marketing promotion, e.g. customers buy a certain product from Business A, which provides a $50 voucher to use at Business B
  • supplied to certain charities or government agencies

• The terms and conditions of the Gift Card cannot allow certain post-supply fees to be charged. The following fees cannot be incurred after the Gift Card has been purchased by the consumer:
  • Gift Card activation fees
  • Gift Card account keeping fees
  • balance inquiry fees
  • inactivity fees

• Ensure that any conditions or restrictions on the use of the Gift Card are clearly stated, including such conditions as to whether a card can be reloaded or topped up, or the activation expiry date for cards that need to be activated. 

For a comprehensive overview of Gift Card rules visit the ACCC website.

* Definition of Gift Card: A Gift Card is defined to mean an article that is commonly known to be a Gift Card or voucher, whether in physical or electronic form and is redeemable for goods or services (Schedule 1, items 4 and 6, subsection 2(1) and section 99A of the ACL).

Sources: Grant Thornton Payments Advisory, Australian Government Treasury and ACCC