Is It Legal For Gift Cards To Have An Expiration Date?

Australians spend a whopping $2.5 billion on gift cards annually. These items are essentially store credit that can be used at participating stores in the same way as cash. However, unlike money, they usually have a strict expiration date. Is this legal? Let’s find out…

In Australia, it is legal for a business to set an expiry date on a gift card, especially if expiration is stipulated within the terms and conditions. According to the ACCC, businesses must clearly state “all conditions and restrictions on how you can use the gift card or voucher.” This is usually found in the fine print at the bottom of the card or on the business’s website.

When you receive your card the first thing you should do is check the expiry date. Businesses are not required to honour a gift card after this date. Unfortunately for Australian consumers there is no minimum period of expiration, meaning that businesses can set their own time limits. The time period that a gift card holder is given to use a card is usually 12 to 24 months after initial activation.

This limit may be extended but there is no legal obligation to do so. Some Australian businesses offer cards without an expiry date. If the card does not specify an expiry date, it can be used within a reasonable time of the original purchase.

The Federal Government’s Gift Cards in the Australian Market Report in 2012 found that no changes were necessary to existing laws regulating gift cards and their expiry dates. Existing consumer protections under the Australian Consumer Law, such as section 23, ensure that gift card’s terms and conditions, including expiry dates, are fair and applied in a reasonable manner by businesses.

Warning though, an expiry date does not mean that Australian businesses are legally required to honour the life of a gift card. In early 2016, the collapse of retailers Dick Smith Electronics resulted in consumers being unable to redeem their gift cards. Fortunately, consumers were offered alternatives, with retailers such as Coles and Kogan offering store credit to gift card holders.

How a gift card can be used varies across businesses. Some may require the entire value of the card to be used in a single transaction, while others allow for subsequent purchases to be made on the same card. It is recommended that you use the total value of the card before the expiry date as it is unlikely that any remaining balance will be refunded.

In short, if you don’t use it, you will likely lose it. Don’t delay redeeming your gift card!

Tom Willis is a representative of LawPath, an online network of 700+ expert lawyers providing legal services to more than 15,000 Australian businesses.

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