March 2018
Changes to gift card expiry dates and
fees
The NSW Government is introducing a mandatory
minimum expiry period of 3 years for gift cards and gift
vouchers sold to a consumer in NSW, as well as a ban
on post-purchase administration fees, starting 31 March
2018. The new requirements have been made by
amendment to the Fair Trading Act 1987.
The changes aim to strike a fairer economic
balance for consumers and businesses in the gift card
market. The reforms give consumers access to the full
value of their gift card over a reasonable period, while
maintaining a workable business model for traders.
When will the changes start?
The reforms will start on 31 March 2018.
The reforms do not apply to gift cards and vouchers
purchased by consumers before 31 March 2018. The
terms and conditions in place at the date of purchase of
those cards will continue to apply.
Does this apply to gift vouchers as well
as gift cards?
Yes. Information on this page should be read as applying
to both gift cards and gift vouchers.
Three-year minimum expiry period
The new law sets a mandatory minimum expiry period of
3 years for most gift card products. The period begins
from the date a gift card is sold to a consumer (issue
date).
Businesses can choose to apply an expiry period longer
than 3 years and no maximum expiry period applies.
Some businesses have already implemented the change,
offering either a 3-year minimum expiry period, or no
expiry date, on their cards.
Ban on post-purchase fees
Once the gift card or voucher has been issued, there is a
ban on charging any post-purchase fee associated with
redeeming the card/voucher that would reduce its value.
Terms used for post-purchase fees that will be banned
include: activation fees, account keeping fees, balance
enquiry fees, telephone enquiry fees and fees applied
when a card is inactive or not being used (sometimes
called dormancy or inactivity fees).
There are fees that a business may charge as part of a
sale that is a cost of processing a payment. These fees
apply regardless of the method of payment, such as
overseas transaction fees, booking fees or payment
surcharge fees. These are not considered post-purchase
fees and are not captured by the ban. Further information
is in the Statement of Regulatory Intent (in PDF format
size: 286kb).
Do the changes apply to small
businesses?
Yes. The only exceptions are on certain gift cards types
that are excluded from the reforms (see below).
How do I know if the laws apply to me?
If you are unsure whether the new laws apply to a
particular gift card or voucher, answering the following
questions will help:
1. Has there been a sale of a gift card?
If the answer is yes, the card or voucher is covered by
the new laws unless specifically excluded.
Cards that have not been sold, such as donated cards or
unsolicited discount vouchers handed out on the street,
and are not covered by the new laws.
2. Has there been a sale of a gift card to a consumer
in NSW that can be used for goods or services in
NSW?

If the sale is to a consumer as per the following definition,
the card is covered by the new laws unless specifically
excluded.
The meaning of consumer in these laws is as it is
defined in the Australian Consumer Law (ACL) - this
includes the sale of gift cards or vouchers to a business
in some circumstances, but not if they are sold for
resupply, among other purposes (ACL, section 3).
Even if you answered yes to both these questions,
the card may still be excluded from the new laws.
Some categories of cards are excluded from the new
laws even if they are sold to a consumer (as per the
definition) in NSW.
An example of a card that fits this category is one that is
`purchased´ by redeeming points through a customer
loyalty program. The table of excluded gift cards below
has the full list of excluded card types.
Included cards
All gift cards or vouchers sold in store or online to a
consumer who is in NSW at the time of sale or sold to a
consumer who provides a NSW address in connection
with the sale are covered, unless specifically excluded.
Excluded cards
Specific gift cards or vouchers are excluded from
complying with the new laws and these are listed in the
table below.
Excluded gift cards
A gift card or voucher that is given by a business for
free to a consumer
A gift card or voucher exchanged for goods returned to
the supplier of the goods
Prepaid cards for phone credit or internet access
ATM cards, debit cards, credit cards or charge cards
Gift cards supplied as part of a customer loyalty or
employee rewards program
March 2018
A gift card or voucher supplied as part of a temporary
marketing promotion as a bonus to the purchase of a
good or service
A gift card or voucher sold for a particular good or
service that is below the market value of the good or
service (a genuine discount)
A gift card or voucher sold or donated for use in a
fundraising appeal, including to a charity or not for profit
organisation
A reloadable card that uses EFTPOS, Visa or
Mastercard or a similar electronic payment system
A gift card or voucher for a good or service available for
a limited time where the card or voucher expires at the
end of that period (for example, entry to a concert or
museum exhibition, or a pair of shoes that is only
available for a limited time)
Temporarily excluded
A non-reloadable prepaid gift card that uses EFTPOS,
Visa or Mastercard or a similar electronic payment
system, sold prior to 1 October 2018 will be excluded
from complying.
From 1 October 2018, these cards must comply with the
new laws.
Gift cards sold online
The reforms apply to gift cards sold to a consumer who is
in NSW at the time of sale or sold to a consumer who
provides a NSW address in connection with the sale.
Cards sold to consumers who provide any address at
the point of sale that is outside NSW are not required to
carry a 3-year expiry date.
Unless you are certain and can demonstrate that the
customer resides outside NSW, it is safer to assume
the customer is NSW-based and therefore the gift
card they purchase from you is subject to these
reforms.
Gift Card is purchased online or over Reforms
the phone apply?

NSW address for delivery and NSW Yes
contact details are provided
Only a NSW contact address provided Yes
Only a NSW delivery address provided Yes
No contact or delivery address are Yes
provided
International websites only a NSW billing Yes
address provided
International websites only a NSW Yes
delivery address provided
Interstate contact/address details and No
NSW delivery details are provided
NSW contact details but interstate No
delivery address is provided
International websites any contact or No
delivery address provided are not in
NSW
Is there a transition period?
Yes, there will be a transition period from 31 March to 30
September 2018.
During this phase, businesses can run down their
existing stock of pre-printed gift cards but must take
steps to inform customers that a 3-year expiry and no
post-purchase fees apply. It is up to each business as to
how they communicate this with the customer, but it must
be clear. Businesses might choose to:
● physically amend cards at the point of sale to strike
out any reference to an expiry period which is less
than 3 years, and/or insert an expiry date which is no
less than 3 years into the future from the date of
purchase
● update terms and conditions on the store´s website
● put signage on stands where gift cards are located
and/or at point of sale
● provide the customer with printed information at the
point of sale about the changes
● add a note to any receipt issued when the gift card is
purchased.
March 2018
It would be prudent for new orders of pre-printed stock to
carry terms consistent with the 31 March requirements.
For gift cards sold online (digital or e-gift cards/vouchers)
during the transition period, businesses should ensure
that the cards or vouchers carry an expiry period of at
least 3 years.
Businesses should take steps to inform customers that a
3 year expiry and no post-purchase fees apply. This may
include:
● updating terms and conditions on the business´s
website
● updating terms and conditions available at check out
● updating the accompanying material (e.g. email that
is sent with the e-voucher) that is sent to the gift
voucher purchaser and/or recipient.
Resources for businesses
NSW Fair Trading has developed resources that
businesses can use at the point of sale to help inform
customers of the changes. View or download the
materials from the Gift card reforms - helping business
prepare for new gift card laws page.
Replacements for lost and stolen cards
If a business chooses to replace a lost or stolen card, the
new law does not apply because the replacement
transaction is not a sale of a new card. The terms and
conditions remain the same as at the time the card was
bought. For cards purchased after 31 March 2018, best
practice would be for a business to issue a replacement
card with the balance of the 3 year expiry period that was
left on the lost or stolen card.
Best practice would also be for the terms and conditions
covering the sale of the original gift card to state whether
a consumer is entitled to a replacement card if the
original card is lost or stolen and if a fee would be
charged.
Activation dates
Activation dates can still be used but a consumer must
have at least 3 years to redeem the gift card from the
date of sale.

Sales to interstate visitors
If a visitor from another state or territory buys a gift card
while they are in NSW and the gift card can be redeemed
for goods or services in NSW, the reforms will apply to
the card or voucher sold to them.
Business to business transactions
Some businesses sell their gift cards or vouchers to
another business who buy cards or vouchers to sell on to
consumers. The laws do not apply to the sale between
these traders because the gift cards have been sold to
be re-supplied and were not sold to a consumer.
For example, a shoe shop that issues gift cards, sells
these to a supermarket to sell in store to its customers.
The new laws would not apply to the sale of the cards
between the shoe shop and supermarket. However, the
laws would apply to the sale of the gift cards between the
supermarket and its customers.
If a gift card is sold to a consumer with a shorter expiry
period, the consumer will still be able to use the card for
3 years as the law overrides shorter expiry periods.
This means that a business in whose name the gift cards
or vouchers are issued must honour the gift card for 3
years, even if is sold to a consumer (the end purchaser
of the gift card) with a shorter expiry period. This is the
case even if the gift cards are sold by a third party.
For example, a shoe shop sells its gift cards with a 12
month expiry period to a supermarket, who then sells the
gift cards to its customers. The 12 month expiry period
would be void and the shoe shop would need to honour
the gift card with a 3 year minimum expiry period.
Businesses should work together to make sure that
compliant gift cards are offered for sale.
Honouring gift cards issued under the
previous ownership
If the business you are now the owner of is a "going
concern" (able to pay its debts when they are due, and
www.fairtrading.nsw.gov.au This fact sheet must not be relied on as
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Language assistance 13 14 50 legislation.
March 2018
continue to operate without any intention to liquidate or
wind up operations for at least the next 12 months) then
you are required to honour existing gift cards purchased
when the business was under previous ownership. If you
would like more information, visit the ACCC website.
Accounting for gift card liabilities
Generally speaking, a minimum 3-year expiry date on gift
cards will mean that it may take longer to account for
revenue from their sale. This is because gift card
revenue is usually accounted for when a gift card is
redeemed or expired. Similarly, the records of financial
liabilities resulting from gift card sales may need to be
maintained for a longer period of time.
However, there is currently no uniform accounting
standard for gift cards, so the impact of gift card reforms
on your businesses may vary depending on your
accounting practices. In certain circumstances,
businesses can account revenue from unredeemed gift
cards earlier than the minimum 3-year expiry date.
Contact your accountant or the Australian Taxation
Office for advice.
Penalties for non-compliance
A breach of the new laws could attract a penalty
infringement notice of $550 and result in a maximum
penalty of $5,500.
Fair Trading has published a Statement of Regulatory
Intent (in PDF format size: 286kb) that sets out our
approach to compliance and enforcement during the
transition period.
© State of New South Wales through NSW Fair Trading
We encourage the reuse of this information under the Creative Commons Attribution 4.0
licence. See NSW Fair Trading's copyright policy at www.fairtrading.nsw.gov.au or email
publications@finance.nsw.gov.au