knowledge | 6 December 2019 |
Traders Must Comply with New Rules on Gift Vouchers
New measures introduced by the Consumer Protection (Gift Vouchers) Act 2019 (the “Act”) apply to gift vouchers issued on or after 2 December 2019.
The new rules:
- require a minimum expiry date of five years from the date of issuance of the gift voucher;
- ban contractual terms which would require consumers to spend the full value of the gift voucher in one transaction;
- ban contractual terms which would limit the number of gift vouchers that can be used in a single transaction; and
- ban contractual terms which would have the effect of cancelling gift vouchers or imposing charges, where the name of the gift voucher recipient differs from that person’s name on their personal identification.
Notably, one practice which has not been banned by the Act is the inclusion of contractual terms which allow the balance of an unused voucher to reduce year by year.
The Act defines gift vouchers to include vouchers, coupons and other documents that are intended to be used as a substitute for money in the payment or exchange of goods and services. Discount vouchers, refund credit notes and loyalty or promotional vouchers are all expressly excluded from the scope of the Act.
The Act also creates a specific exclusion for electronic money gift vouchers which are already subject to extensive regulation by the European Union and Central Bank.
The Competition and Consumer Protection Commission (the “CCPC”) has responsibility for the enforcement of these new provisions.
Given that gift vouchers and cards are often produced weeks before their subsequent sale, it is likely that vouchers issued on or after 2 December 2019 could refer to an expiry period which is less than the new minimum of five years. The CCPC recognises that transitional issues can arise while businesses make adjustments to contractual terms, and recommends that documentation provided with the gift voucher could include, for example, a corrective statement that the gift voucher will be valid for five years from the date of issue.
This briefing is for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.