The Australian Competition and Consumer Commission (ACCC) has helped clear up some of the confusion surrounding the sale of gift cards. These rules all came into effect on 1 November 2019.
Just in time for Christmas!
If your small business is offering a gift card as an option, there are a few simple rules to follow:
Gift Card Expiry Date:
All gift cards sold must be redeemable for at least three years after the date of purchase. A gift card must always display the expiry date either as the full date, or a period of time. The gift card must display the purchase date in order to determine the expiration date. For example: ‘Gift cards expire 4 years from the issue date. Date of issue: 12/12/19.’
There are a few instances where this requirement does not apply. The ACCC website outlines these in more detail here.
No Post-Supply Fees on Gift Cards:
A fee charged to a recipient after the gift card has been supplied is a post-supply fee. When a gift card is redeemed, these must not be applied. Further to this, there should be no terms and conditions on the use of a gift card allowing you to charge these fees.
Post-supply fee requirements don’t apply in some instances. These include:
- booking fees, where those booking fees are the same, or substantially the same, as fees or charges for making a booking using a payment method other than a gift card
- the fees associated with exchanging currencies
- when a gift card is reissued after being lost, stolen or damaged
- payment surcharges.
These requirements don’t apply when the gift card is provided second hand. This is also the case for gift cards supplied to certain charities and government agencies.
Changes to Gift Cards Supplier
If you have taken over as owner of a new business, it is your responsibility to honour any existing gift cards if the business was:
- sold as a ‘going concern’, that is, the assets and liabilities of the business were sold by the previous owner to the new owner
- owned by a company rather than an individual, and the new owner purchased the shares in the company.
Penalties:
There are hefty penalties attached to breaching these new gift card rules. They can be viewed in full at ACCC Fines and Penalties. In order to avoid these, simply follow these basic rules and ensure you’re covered this Christmas period.
Found this useful check out other topics we have discussed:
- Full Temporary Expensing
- CFO – Are You Ready for an Outsourced CFO?
- Hazards of DIY Bookkeeping
- Financial Reporting 101: Can you afford to be doing it wrong?
