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

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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.


    Cant decide what to give someone, how about the gift of cash that shows you made at least one choice.... but taking away the recievers choice. By choosing the store your forcing them to shop at, buy their products, and force them to spend money out of their own pocket (so reciever feels oblidged to spend their own money), has restrictions applied, and has an expiration date.

    ... or play it safe, and give them the cash.

    Is a worrying trend. When I was growing up there was no expiry date on these things. I'd receive some for Christmas and wait until there was something I really wanted at that retailer. Even though feeling they were slightly a con.
    Now, with expiry dates, they are a complete con.

      Expiration dates limit a business's liability.
      It means that they only have the liability showing on their bottom line for a known period.
      No different to banks only accepting cheques for a fixed period of time.

    Just give cash. Money doesn't expire.

    Gift cards are a rort that needs to be stopped or fixed. They should never expire, they should be treated the same as money in the bank, you've been kind enough to give these companies your cash, which they can then use to pay their suppliers, they need to honour that debt they have to you for as long as it takes.

    Also, gift cards should be considered secured creditors, above other financial lenders (which is what they are). While banks get the opportunity to perform due diligence for any money lent, gift card purchasers get no rights. I don't imagine the local book store will be willing to cough up the P&L and balance sheets for the last 3 years, along with the 5 year business plan and budgets, before I purchase that gift card. Without that information, how are people supposed to know if this is a safe purchase? People need to be protected if they want to continue offering these services.

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