A gift card is loaded with a preset value to pay for goods and services. They can be a physical or electronic and may be a card, voucher or code.
The full value of the card can be used over multiple transactions. This means you can use them more than once until you have used up the total value of the card.
Gift cards can’t usually be exchanged for cash. The business may give change in cash if the left-over amount on the card can’t be easily used e.g. 5 cents.
Gift cards expiry
Gift cards bought on or after 1 November 2019 must be valid for 3 years after the day they were purchased. The expiry date must be clearly shown on the card.
The 3-year rule does not apply to gift cards:
- able to be reloaded or topped up
- donated for promotional purposes. For example, vouchers for a business grand opening
- available only for a specified period. For example, for a specific event like a summer festival
- supplied at a genuine discount. For example, $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
- supplied to certain charities or government agencies.
Business issuing gift cards
Businesses issuing out a gift cards, must clearly state:
- all conditions and restrictions on use of the gift card. This includes if there are any limitations on the number of transactions
- the expiry date of the gift card
- an activation expiry date if applicable
- whether the card can be reloaded or topped up.
Expiry dates
The expiry can be shown as a period of time. The issue date must be shown, so the expiry date is clear. For example, “Valid for 3 years from the date of issue. Date of issue: March 2024”.
A business does not have to honour the gift card after the expiry date.
No expiry dates
If there is no expiry date, this must be stated on the gift card. For example, “No expiry date” or similar wording.
The display rule does not apply to:
- second-hand gift cards
- gift cards supplied to certain charities and government agencies
- gift cards that can be reloaded or topped up.
Post-purchase fees
Gift cards cannot include fees or charges after the gift card has been purchased. A business cannot have terms and conditions allowing post-purchase fees, this includes:
- activation fees
- account keeping fees
- balance inquiry fees
- inactivity fees.
A business can charge a fee for:
- processing such as booking fees or credit surcharges
- overseas transaction
- replacement for a lost, stolen or damaged card.
The post-supply fee rule does not apply to gift cards that are:
- second-hand
- given to some charities or government agencies
- able to be reloaded.
Change of business owners
The new owner must honour the gift card if the business was:
- sold as a ‘going concern’. This means all the assets and liabilities of the business were sold to the new owner
- previously owned by a company and the new owner purchased shares in the company.
Contact Consumer Protection for advice if the new owner won’t accept the gift card.
Business closes down
If the business goes bust (becomes insolvent), the gift card holder becomes an ‘unsecured creditor’. The administrator can set how a gift card can be used e.g. by a certain date or in-store only.
A consumer may be able to get their money back if they paid by PayPal or credit card.
Promotional vouchers and discount coupons
Discount vouchers offer a discount off products and services such as:
- shopper dockets
- loyalty programs like stamp cards and online or in-app equivalents.
A business must clearly state the conditions and restrictions for using the vouchers.
The business cannot:
- mislead you about what you’re buying
- leave out information – for example, failing to state a product is only free if you buy something else.
For example, it must be clear if the vouchers apply to:
- a particular business
- another product or service from the business
- at certain times or days
- stock limitations
- expiry dates.
Voucher books
Some businesses sell books of coupons or vouchers. Examples include discounts for activities over school holidays or vouchers for local restaurants.
If the book costs more than $100, the business must give you a written contract, including a cooling-off period.
The Australian Consumer Law and Fair Trading laws also cover free voucher books as there is a trade between a business and a consumer.
Tips about voucher books
To work out if a voucher book is worth the price, ask yourself:
- How many coupons do I have to use before recouping what the book cost?
- Which businesses are included? Where are they located?
- What can I do if the business doesn’t accept the voucher?
- How long is the voucher valid for?
- What happens if the business goes bust before I can use the voucher?
- What conditions apply?
- Are there any extra costs in using the voucher?
- Are there restrictions on when I can use the voucher? E.g. Only allowed in ‘off-peak’ times.
- Are ‘free’ offers really free or do I have to buy something? Are there limits? E.g. Free to first 5 customers or first one free then full price for extras.