The Gift Card Act

On 11 September 2024 the House of Representatives passed the Fair Trading (Gift Card Expiry) Amendment Act 2024 (Gift Card Act – “GCA”). The GCA amends the Fair Trading Act 1986 (FTA), which seeks to contribute to a trading environment where consumers are protected, businesses compete effectively and both can participate in markets confidently.

So what does the GCA do? It inserts what can be called “Gift Card Provisions” into the FTA

Most people will know that the FTA prohibits misleading and deceptive conduct, prohibits unfair terms in standard form consumer contracts and empowers the Minister of Consumer Affairs (currently the Honourable Andrew Bayly) to create regulations for product safety standards.

So what does the GCA do? It inserts what can be called “Gift Card Provisions” into the FTA. These Gift Card Provisions do a few things.

First, they create a prohibition on persons in trade from selling gift cards to consumers with anything less than a 3 year expiry date and imposes an obligation on the trader to “prominently” state when the card “ceases to be redeemable.”

Second, they create a statutory definition of “gift card”, which is “a card or voucher (in whatever form) that is redeemable for good or services.” The definition lists a number of exceptions, including—

• Cards or vouchers exchanged for returned goods.
• Prepay cards for telecoms, public transport and utilities including electricity, gas, and water.
• Debit, credit and travel cards or similar that allow cash withdrawals.
• Cards or vouchers supplied through a loyalty program (except those obtained through redeeming loyalty points).
• ‘Event specific’ cards and vouchers for the likes of concerts and festivals.
• Cards or vouchers sold for charity fundraising.

Third, the Gift Card Provisions create a number of enforcement and penalty mechanisms, which include:

• Making breaches of the Gift Card Provisions infringement offences punishable by a $2,000 fine; and
• Empowering the Commerce Commission to apply for court orders. Granting an injunction against a trader in breach of the Gift Card Provisions or Requiring the trader, at the trader’s own expense, to disclose information to the public (or specific people) or publish an advisement about a breach of the Gift Card Provisions.

Up until the passage of the GCA, there was no legislative provision governing gift cards. Indeed, it took almost 40 years for Parliament to decide that this gap posed enough of a market problem to fix through law.

The GCA will similarly be slow to come into force. It won’t take effect until 16 March 2026, 18 months after the date of Royal Assent (which was 16 September 2024). Retailers therefore have something of a buffer to adapt their practices and programs. 

This article is for general informational purposes only and does not constitute legal advice. While every effort has been made to ensure the accuracy of the information, readers should not rely on this article as a substitute for professional legal advice.