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NSW gift card changes to expiry dates & fees

The NSW Government has recently introduced a mandatory minimum expiry period of 3 years for gift cards and gift vouchers sold to a consumer in NSW.

More than $2.5 billion of gift cards and gift vouchers or approximately 34 million cards, are sold in Australia every year. Of these gift cards, approximately 8% are never validated to their full balance due to the card expiring before the recipient has the opportunity to redeem the full value of the gift.

Having been inundated with complaints over the last few years, NSW Fair Trading has made the changes to “put the consumer first” in the gift card market, extending the expiry period from 1 year to 3 years for all gift cards sold in NSW. The NSW gift card changes also include a ban on post-purchase administration fees, starting 31 March 2018. The NSW government insists that the new reform will give consumers access to the full value of their gift card over a reasonable period of 3 years, while also maintaining a workable business model for traders.

To keep you informed, we’ve put together some answers to FAQs on the new changes:

When do the NSW gift card changes start?

The reforms started on 31 March 2018. The reforms do not apply to gift cards and vouchers purchased by consumers before 31 March 2018. The terms and conditions in place at the date of purchase of those cards will continue to apply.

Does this apply to gift vouchers as well as gift cards?

Yes. Changes apply to both gift cards and gift vouchers.  The period begins from the issues date, or the date a gift card is sold to a consumer. Businesses can choose to apply an expiry period longer than 3 years and no maximum expiry period applies.

Ban on post-purchase fees

Once the gift card or voucher has been issued, there is also ban on charging any post-purchase fee associated with redeeming the card/voucher that would reduce its value. Terms used for post-purchase fees that will be banned include: activation fees, account keeping fees, balance enquiry fees, telephone enquiry fees and fees applied when a card is inactive or not being used (sometimes called dormancy or inactivity fees).

However, there is an exception to the ban on post-purchase fees, which include any fees that are part of the cost of processing payment, which apply regardless of the method of payment. This might include overseas transaction fees, booking fees or payment surcharge fees and are not are not captured by the ban.

How do I know if the NSW gift card changes apply to me?

If you are unsure whether the new laws apply to a particular gift card or voucher, answering the following questions will help:

1) Has there been a sale of a gift card? If the answer is yes, the card or voucher is covered by the new laws unless specifically excluded. Cards that have not been sold, such as donated cards or unsolicited discount vouchers handed out on the street, and are not covered by the new laws.

2) Has there been a sale of a gift card to a consumer in NSW that can be used for goods or services in NSW? If the sale is to a consumer as per the following definition, the card is covered by the new laws unless specifically excluded.

Get expert help with your new gift cards

If you would like expert help on putting together the terms and conditions for your new gift cards, talk to the Redegroup today on 1800 815 512. We know the ins and outs of the new changes and are ready to help you!

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