Gift cards are an easy product for an online business to sell. They suit last minute shoppers and they bring new customers to your store. They also come with a set of national rules that many small sellers have never read.
This guide covers the main gift card rules under the Australian Consumer Law. It explains expiry dates, fees, what must be shown on the card and the cards that are exempt. It is general information to help you set up your gift card offer properly.
Where the gift card rules come from
The current rules were introduced through the Treasury Laws Amendment (Gift Cards) Act 2018. They form part of the Australian Consumer Law and apply across the country. The ACCC guidance on gift cards and discount vouchers says the rules cover gift cards bought on or after 1 November 2019.
The national consumer law guide to the gift card laws says cards sold before that date keep their original expiry period and fees. It also says terms that do not comply are void. The new requirements apply no matter what the card itself says.
New South Wales and South Australia also have their own local gift card laws. If you sell to customers in those states, check with the state consumer protection agency as well. Laws can change, so it pays to look at the current guidance before you launch.
The three year minimum expiry period
Most gift cards must be redeemable for at least three years from the day they were supplied or bought. You can offer a longer period if you like. There is no maximum, and a card can be sold with no expiry at all.
For an online store, the date of supply is usually the date of the order. Your system should record that date for every card you sell. That record helps you answer a customer who asks how long their card has left.
Once a valid expiry date has passed, the ACCC says you do not have to honour the card. That only works if the expiry date met the rules in the first place. A card that showed no expiry, or a shorter period, is a different story.
What must be shown on the card
The expiry date must be displayed prominently. You can show it as a full date or as a period of time. If you show a period, the issue date must also appear so the customer can work out the expiry.
If your card has no expiry date, it must say so. Treat digital cards sent by email the same way as plastic cards posted out. The same details should also sit on your product page, so buyers see them before they pay.
The ACCC also says you must clearly state any conditions and restrictions on use. That includes any limit on the number of transactions. You must say whether the card needs activating, the activation deadline and whether it can be reloaded or topped up.
Clear product pages help sales as well as compliance. If you promote gift cards with display ads, our guide to the elements of an effective banner ad design covers layout and wording. Keep the key conditions easy to find from any ad that links to the card.
Fees you can and cannot charge
For cards bought on or after 1 November 2019, most fees charged after purchase are banned. The card terms cannot allow them either. The ACCC lists activation fees, account keeping fees, balance enquiry fees and inactivity fees as examples.
Some charges are still allowed. These include booking fees that match, or nearly match, those charged for other payment methods. Currency exchange fees and fees for reissuing a lost, stolen or damaged card are also excluded from the ban.
The national consumer law site says businesses may charge an upfront fee when the card is bought. Payment surcharges and overseas transaction fees are also on its list of allowed charges. Any fee you do charge should be shown clearly at checkout.
Cards that are exempt from the three year rule
Not every card or voucher has to last three years. The ACCC lists a number of exemptions to the expiry rule. The main ones for an online business are below.
- Reloadable or top up cards
- Promotional giveaways and cards issued under a temporary marketing promotion
- Cards valid only for a specified event or period
- Cards sold at a genuine discount
- Employee reward schemes and customer loyalty programs
- Second hand cards
Treat these exemptions with care. A “promotional” card that is really sold at full price is still a normal gift card. If you are unsure which group your card falls into, get advice before you rely on an exemption.
Discount vouchers and loyalty offers
The ACCC groups shopper dockets, gift vouchers and loyalty stamp cards under discount vouchers. This includes online and in app versions. Businesses must clearly state all conditions and restrictions on their use.
Offers can be limited to a particular purchase or certain days. They can also run for a set time or while stock lasts. The point is that the limits must be stated up front, not added after the customer has the voucher.
If you run voucher campaigns for nearby shoppers, the article on geo intent marketing for customers searching nearby explains how local timing works. Keep every condition in the ad and on the landing page the same. Mixed messages are where complaints often start.
What happens if your business closes or is sold
Things change in any business, so plan for the cards already in customers’ hands. The ACCC says a temporary closure that restricts card use should come with a remedy. One example it gives is extending the expiry date.
If the business is sold as a going concern, new owners must honour existing cards and vouchers. The same applies if the new owner buys the shares of the company running the business. Anyone buying or selling an online store should list the gift card balances in the sale papers.
If a company becomes insolvent, the ACCC says card holders become unsecured creditors. That is a poor result for your customers and your reputation. Tracking the value of unredeemed cards in your accounts helps you see that liability clearly.
Setting up gift cards on your online store
If your ecommerce platform has a gift card feature or add on, look at its settings first. Check the default expiry setting before you go live, in case it is shorter than three years. Change it, or switch expiry off altogether.
Next, check the card email template and the product page. Both should show the expiry or the “no expiry” statement, plus the issue date if needed. Add any conditions, such as whether the card works in store as well as online.
Then write a short gift card terms page in plain English. Link to it from the product page, the checkout and the card email. People find the page through search too, so the SEO tips every business with a website should follow apply here as well.
Finally, measure how the cards perform. Look at how many are bought, how many are redeemed and what customers spend on top. The guide from content to conversions in digital campaigns has ideas for turning that data into better promotions.
Frequently asked questions
Can my gift cards expire after 12 months?
In most cases, no. Gift cards bought on or after 1 November 2019 must be redeemable for at least three years. A shorter period is only possible if the card fits one of the listed exemptions.
Can I charge a fee to check a card balance?
No. Balance enquiry fees are one of the post purchase fees the ACCC lists as banned. Your card terms cannot allow them either.
Do the rules apply to digital gift cards?
Play it safe and treat them the same as physical cards. The ACCC says discount vouchers include online and in app versions. A gift card sent by email still needs the expiry details shown clearly.
Who enforces the gift card rules?
The ACCC can investigate breaches and take compliance or enforcement action. It does not approve cards before they are sold or settle individual disputes. State and territory consumer protection agencies also handle questions from businesses and customers.
This article is general information only and is not legal advice. Laws and processes can differ between states and territories and they change over time. Speak with a qualified lawyer about your own business before relying on it.