Move to extend expiry dates for gift cards nationwide

Yet most us have received gift cards for our birthdays or Christmas that we've lost or failed to use before the expiry date. In fact, Australians spend about $2 billion a year on gift cards but between 10 and 27 per cent of cards are never redeemed.

With expired gift cards costing consumers at least $200 million a year, pressure is building on other states and territories to follow NSW and make them valid for a minimum of three years.

From March 31 this year, gift cards and gift vouchers bought in NSW in person and online will have a minimum three-year expiry date.

There will be a transition period of "some months" for those businesses who have pre-printed gift cards with shorter expiry dates with the length of the transition period yet to be released by NSW Fair Trading.

Under the NSW reforms, businesses will still be able to charge an administration fee at the time the gift card is bought.

However, once a card or voucher is issued, there is a ban on any fee for redeeming it.

Consumer group Choice is urging state and territory governments to implement similar reforms to protect shoppers.

"With these reforms making gift cards simpler and fairer for consumers, we hope it signals the beginning of the end of retailers cashing in at our expense," says Choice spokesman Tom Godfrey, speaking when the reforms were announced last year.

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

A spokeswoman for Victoria's Minister for Consumer Affairs Marlene Kairouz says the Andrews Labor government has called on the federal government to consider the national cross-border trade in gift cards under the relevant part of Commonwealth law.

While consumer protection generally falls within state and territory jurisdictions, the Trade Practices Act and Corporations Act have been used by federal governments to ensure consistent consumer protection standards across the country.

"Given the national reach of many retailers and businesses, we need a national approach to the regulation of gift cards," the spokesman says."It's time for the Turnbull government to take the lead on this issue, and provide a fairer deal for consumers."

A spokesman for Yvette D'Ath, the Queensland Attorney-General who has responsibility for consumer affairs, says the Queensland government is open to working with stakeholders on this issue and to help strengthen protection for consumers.

The South Australian Liberals have promised, if they win election in March, to legislate so gift cards bought in the state would have a minimum expiry date of three years.

Writing for The Conversation website last year, Nicole Ibbett, a lecturer in the school of business at Western Sydney University, says the NSW reform would go some way towards solving the problem of unredeemed gift cards, but there are other issues besides short expiry dates.

"Gift card terms and conditions vary widely, making it hard for consumers to understand what their rights and obligations are," she says.

"In addition to expiry dates, common problems with gift cards arise from the terms and conditions and the inability to use gift cards when the retailer becomes insolvent."

In early 2016, Dick Smith Electronics collapsed, leaving many of those holding gift cards out of pocket.

In her research, Ibbett found issues with a wide range of gift card terms and conditions.

Some terms and conditions specify limits on the use of the gift card. For example, the card must be used in store, but not online.

"Consumers unaware of these limitations may be unpleasantly surprised when their gift card is unable to be used," Ibbett said.

"Some retailers offer replacement of lost or stolen gift cards provided proof of purchase or card identification number is available. When the holder of a gift card is not the original purchaser this may be problematic.

"If you do purchase a gift card as a present, you probably should either keep the receipt or pass it on to the receiver along with the gift card."

Sally Tindall, a spokeswoman for comparison site RateCity, says the most common expiry date is 12 months, with some gift cards offering as little as three months.

"Short expiry dates are the biggest offender, but shoppers also get caught out with postage and activation fees and conditions on where and how the money is spent," she says.

"The other way shoppers end up forfeiting their cash is by only spending part of the value of the gift card. Often the balance left behind is never spent and when the card expires, retailers keep the difference."

Tindall says now the NSW government has stepped in, the pressure is on other states to follow suit. There are cards with no expiry dates, such as those from Apple and Bunnings. The Good Guys and JB HI-FI have recently announced they have increased expiry dates on their cards from 24 months to unlimited and will honour expired gift cards.

Larry Samuels, the managing director of Givex Australia, one of the largest gift card processors in Australia, says most of the retailers that use its gift cards will honour expired cards at the request of the card holder and it is always worth contacting the retailer to see if it will honour expired cards.

He says the "general rule" among his clients is that they are going to apply the three-year expiry date nationally as it is easier for them than having different expiry dates depending on which state or territory their cards are bought.

Barbara Burt, a 31-year-old beauty therapist from Sydney, is annoyed that her gift voucher's one-year expiry date lapsed late last year.

At the time the gift card from RedBalloon expired, Burt was preoccupied as her partner was undergoing knee surgery.

"Things happen in life that are outside of our control," she says.

Burt runs a mobile beauty business and she has gift vouchers for her customers that have no expiry dates.

"It builds good rapport with my clientele," she says.

Recently RedBalloon increased the expiry dates to three years for any voucher bought since October 18, 2017, when the NSW bill mandating minimum three-year expiry dates was passed.

RedBalloon says on its website that experience vouchers, gift vouchers and gift cards bought before that date must be used within the expiry period.

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