Australians spend $2.5 billion a year on gift cards, but as much as $200 million goes unredeemed and back into the pockets of businesses.
Now there's a chance some of that money could find its way back to shoppers
under reforms proposed by the NSW government.
The reforms will mandate that all gift cards sold in NSW must be valid for at
least three years, putting an end to businesses deeming them void in
periods as brief as half a year.
"Most gift cards are offered with a 12-month expiry date; however, up to
eight percent of recipients do not use the full balance in time. This
means NSW consumers are losing tens of millions of dollars a year," says
Matt Kean, the Minister for Innovation and Better Regulation.
Westfield, Jetstar, Bras N Things and Country Road, as well as Hoyts and
Event Cinemas, are just some of the retailers that will have to revise the
expiry periods of gift cards from 12 months to three years under the
mandate once it comes into effect.
NSW is the only state to mandate expiry periods for gift cards, but the
move could prompt businesses to lift expiry periods nationwide.
Consumer group CHOICE, which has long campaigned for expiry periods of five
years on gift cards, described the changes as a win for consumers, and one
that was a long time coming.
"Unfair expiry dates on gift cards have been problem for consumers for
years and these reforms will make gift cards simpler and fairer," says Erin
Turner, acting director of campaigns and communications at CHOICE.
"We'd like to see these reforms rolled out across the country to make gift
cards fairer for all consumers."
But the proposed reforms were described as 'red-tape' by the lobby group
"[It] places an unnecessary regulatory burden and significant
additional administrative costs on small, medium and large businesses,"
says Russell Zimmerman, the executive director of Australian Retailer
More than 1300 complaints have been lodged about gift cards to NSW Fair
Trading over the past five years, with the majority of them regarding
expiry periods and undisclosed terms and conditions.