Treasury has released for public consultation an exposure draft of the Competition and Consumer Amendment (Gift Cards) Bill 2018.
UPDATE: Bill introduced into House of Representatives 20 September 2018.
UPDATE: Bill passed and assented 25 October 2018.
If passed, the Bill would amend the Australian Consumer Law (ACL) to:
• mandate minimum three-year expiry dates for gift cards;
• require gift cards to prominently display expiry dates; and
• prohibit gift card issuers from charging certain post-supply fees, which can erode the balance on a gift card over time and operate as a de facto expiry date.
The amendments will apply to gift cards supplied on or after 1 November 2019. Background
There is currently no uniform national regulation for the minimum length of time a gift card should be valid.
What is a gift card?
A gift card is defined to mean an article that is commonly known to be a gift card or voucher, whether in physical or electronic form and is redeemable for goods or services.
Although the ACL does not apply to financial services and products which are regulated by the ASIC Act and Corporations Act, the amendment provides, even if certain gift cards are a financial product, they will now also be regulated by the ACL for the purposes of these changes.
A regulation-making power will enable the Government to make regulations to add to or exempt items from the definition of gift card taking into account future changes in technology and products and to ensure the definition of gift cards remains fit for purpose.
Items which are not gift cards include a credit card, charge card, debit card and public transport tickets.
The Treasury Laws Amendment (Gift Cards) Regulations 2018 was registered on 13 December 2018 to amend the Competition and Consumer Regulations 2010 to specify articles that are not gift cards, identify fees that are not considered post-supply fees, and exempt gift cards, persons or gift cards supplied in circumstances from some or all of the requirements in the Treasury Laws Amendment (Gift Cards) Act 2018.
For the purposes of section 99A of the Australian Consumer Law, an article of any of the following kinds is not a gift card:
(a) an article that:
(i) is redeemable for goods or services; and
(ii) can have its value increased after it is supplied other than because of a reversal of a payment made using the article or the correction of an error;
(b) an article that is only redeemable in relation to one or more of the following:
(iii) a telecommunications service.
Items do not have to be only promoted as a gift product to be regulated.
Gift cards can be purchased for use by the purchaser and do not have to be gifted to others. For example, people may choose to buy gift cards when they are on sale for their own personal use.
A gift card can include a card provided by insurance companies to policyholders to discharge a legal liability under the terms of a policy, for example where the card provided is in the same form as those available to the general public as a gift card.