Will the Government Make Retailers Scrap Gift Card Expirations?

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By Published On: May 25, 20180 Comments

Following on from the introduction of legislations to extend gift card expiration dates in Sydney last year, the Federal Government is investigating whether or not retailers should scrap expiry dates altogether.

The Australian Treasury is inviting members of the public and business community to share their thoughts on whether gift cards purchased in Australian stores should have an expiration date.

According to the Treasury, roughly 34 million gift cards are sold in stores and online each year, with the Sydney Morning Herald reporting that consumers spend approximately $70 million on unused gift cards annually. This is a figure the Australian Government believes causes “consumer detriment”, especially since a lot of consumers aren’t aware of when their gift vouchers are due to expire.

“There is currently no uniform national regulation for the minimum length of time a gift card should last,” the Treasury’s executive summary of the proposal reads.

It’s believed this motion has been introduced since New South Wales introduced new laws in late 2017 making it a requirement for all gift cards sold within the state to have an expiration date of at least three years.

In its bid to reduce consumer detriment, the Australian Treasury has put forth three options: the status quo (businesses can continue to determine their own expiry dates), a prohibition on gift card expiry dates, or three-year minimum expiry dates nationwide.

At this stage, the Treasury says a minimum three-year expiration is the preferable option.

“Such an approach would address the information asymmetry that may be faced by a recipient of a gift card who is unaware of its expiry date, and expects that it lasts for a certain period of time,” the report says.

The Treasury does acknowledge that more research into gift cards is required to identify key problems, such as whether different types of gift cards should be treated differently, or if an all-encompassing definition is appropriate, and if an expiration date is necessary for the operation of a successful gift card scheme.

Any changes to legislation around gift card policies will need to be upheld by retailers, regardless of what medium the gift card is provided/redeemed through.

Submissions are open until Wednesday 30 May 2018 and can be made via the Treasury’s website.

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Heather Bone