Christmas is coming and there is always that one person who is really hard to buy for, so the trusty gift card seems like the answer. It’s usually loaded with an amount of money that the recipient can use for goods and services at the store/s specified on the card or voucher. A gift card gives the freedom for someone to choose something for themselves that they will hopefully actually use and enjoy. It makes sense as a gift for some of those picky friends and family members, but some people (like me!) tend to forget they have unused gift cards for extended periods. With another Christmas season approaching you suddenly remember that gift card in the back of your wallet from last year, but is it still valid?
The good news is that there was a significant change to the Australian Consumer Law relating to the issue of gift cards in 2019. Any card or voucher purchased after that date, including cards for online stores that trade in Australia, must comply with that legislation. Most gift cards now have a mandatory three-year minimum expiry period, with only limited exceptions, giving people like me time to actually remember to use it. Gift cards must also prominently display their expiry date, or confirm that there is no expiry date, and businesses must provide clear information about the conditions of their use. There is also now a ban on businesses charging post-purchase fees like activation, account-keeping, inactivity or balance enquiry fees so delays in using the gift card should not cause a recipient to incur any additional fees or charges.
If a business changes owners, the new owner is required to honour existing gift cards if the business was sold as a going concern. However, if a business becomes insolvent and ceases trading, unfortunately, a gift card holder becomes an unsecured creditor and may not be able to recover the value if the business has insufficient funds to cover all of its debts.
So don’t be embarrassed to pull those gift cards from last year out of your wallet and use them this Christmas season to give yourself a gift you can enjoy, which was no doubt the intention of the gift giver. If you are the one gifting, consider that the recipient might be someone like me who forgets to use the card for a while, and make sure that expiry date is clearly visible on the card when you purchase it!