Money Your Budget Retailers to accept gift cards for three years under tough new laws to protect consumers

Retailers to accept gift cards for three years under tough new laws to protect consumers

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Retailers will be forced to honour gift cards for at least three years in NSW under new legislation. Photo: Getty
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When it comes to buying presents, gift cards can be an easy fix. But they’re often harder to get rid of, with Australians collectively losing $200 million each year from unredeemed gift cards.

In NSW alone, $60 million is squandered on unused cards.

To help ease the problem, retailers will be forced to honour gift cards for at least three years under new legislation proposed by the New South Wales government.

Legislation will be introduced this week to State Parliament to enforce a minimum three-year lifespan by the Minister for Better Regulation, Matt Kean.

CHOICE consumer group has applauded the push, with spokesperson Tom Godfrey saying the reforms are “a long time coming and are a big win for NSW consumers”.

Buying them is like adding terms and conditions to cash, said Mr Godfrey.

“While a gift card might seem like a convenient and simple purchase at the point of sale, in reality you’re often buying tricky terms and conditions your loved one will have to comply with,” he said.

“Although popular with consumers, these cards are a gift horse for retailers who can take advantage of inflation, changes in value and low redemption rates.

“The least these companies can do is offer a product that’s fair, including a minimum expiry with no sneaky fees.”

Shadow Labor Minister Yasmin Catley said Labor would support the measure to increase consumer protections.

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Consumers are set to have more time to use gift cards with laws about expiry dates to change in NSW. Photo: ABC

NSW Greens spokesperson for Fair Trading, Justin Field, said the party would support the reforms.

“The big retailers are pocketing the value of these unreformed gifts, which is little better than theft,” a spokesperson for Mr Field told The New Daily.

A spokesperson for Victoria’s Minister for Consumer Affairs, Marlene Kairouz, told The New Daily the state Labor government would consider the proposal.

“We look forward to examining the proposal by the NSW government and we’ll take a look at whether the expiration of gift cards is an issue that requires further action in Victoria,” the spokesperson said.

Mr Godfrey said he hoped the NSW reform signalled “the beginning of the end of retailers cashing in at our expense”.

“We’d like to see these changes rolled out across the country to make gift cards fairer for all consumers.”

Mr Godfrey said three years was a reasonable expiry period, but encouraged Australians to shop around for purchases without a time restriction.

Most currently expire after 12 months.

Apple and Bunnings Warehouse gift cards do not have an expiry date. The cards are not allowed to expire in Canada and parts of the United States.

Mr Kean said the NSW government estimates Australians buy about 34 million gift cards worth $2.5 billion a year.

“When consumers hand over their hard-earned money, they rightly expect to get what they pay for,” he said.

“I’m fed up of business taking money from shoppers and providing nothing in return.

“We’ve had more than 1300 complaints about gift cards to NSW Fair Trading over the past five years – mostly about expiry periods and undisclosed terms and conditions.”

The proposal would also stamp out post-purchase fees and charges.

In 2012, the Commonwealth Consumer Affairs Advisory Council estimated the rate of unredeemed gift cards was between three and eight per cent.

A 2014 CHOICE survey found a third of respondents had lost the full value of at least one gift card in the previous three years.

Gift card holders are also among the last creditors to be considered when a company goes bust.

More than 45,000 gift cards at a value of $2.7 million were not honoured after Dick Smith Electronics called in administrators in January 2016.

The New Daily has contacted Mr Kean, and Queensland Fair Trading Minister Yvette D’Ath.

-with AAP

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