Attention retailers: Higher gift card penalties are coming after Christmas

Gift card rules have become stricter over the last few years, cracking down on expiry dates and post-supply fees. And from January 1, 2023 things are going to be even tougher on retailers that don’t comply.

While gift cards sold in Australia aren’t required to completely waive expiry dates, gone are the days of 12-month limits.

Back in November 2019 new rules states that gift cards and vouchers had to be sold with a minimum expiry period of three years. In addition to this, the expiry dates had to be clearly displayed on the card.

The rules also prevented businesses from charging post-purchase or any other kind of admin fee to reduce the overall value of the card. Exceptions to this include payment processing, overseas transaction fees and replacing lost or stolen cards.

New gift card infringement penalties

While there were already penalties in place for non-compliance with these laws, they’re about to go up.

The ACCC is able to hand down infringement notice penalties when it has “reasonable grounds” to believe there’s been a breach of gift card provisions.

Currently, this can be $12,210 for corporations and $2442 for individuals.

From January 1, those sums will be bumped up to $15,125 for corporations and $3025 for individuals.

What rules do businesses need to follow?

We’re currently in the middle of the Christmas rush, meaning there are a large number of gift cards and vouchers being purchased in stores and online. And the rules apply to both physical and digital vouchers.

So if your business deals in gift cards — especially if it’s an SME — and you’re not 100% sure whether you’re across the compliance, now is a very good time to make sure everything is copasetic.

Here are the main rules that need to be adhered to:

• They must be valid for at least three years;
• The expiry date must be shown;
• ‘Post-supply’ fees must be included;
• Card conditions must be clear; and
• A business must clearly state:
  1. All conditions and restrictions on the use of the gift card, including whether there are any limitations on the number of transactions
  2. The expiry date of the gift card
  3. The activation expiry date for cards that need to be activated
  4. Whether the card can be reloaded or topped up.

You can find the full list of rules, important exceptions and more information over at the ACCC’s website.