The days of gift cards that expire after 12 months may soon be limited after the Economic Development, Science and Innovation Committee presented its report on the Fair Trading (Gift Card Expiry) Amendment Bill to the House on 1 May, recommending its passage. The bill seeks to amend the Fair Trading Act 1986 so that people who receive gift cards have more time to use them.  

What is the Fair Trading (Gift Card Expiry) Amendment Bill?

Initially submitted by National MP Melissa Lee (and now in the name of National MP Dan Bidois), the Fair Trading (Gift Card Expiry) Amendment Bill was pulled from the ballot in November 2022. The bill passed its first reading in August 2023 and was referred to the Economic Development, Science and Innovation Committee.    

The bill seeks to "prohibit the sale of gift cards with an expiry date of less than three years after the initial sale date".  

The committee's suggested changes to the bill

After receiving and reviewing submissions made on the bill, the committee suggested some changes in its report, including:  

• expanding the list of exclusions (to cover time-limited events and second-hand market or cards issued in relation to charities);    
• clarifying the list of exclusions (in relation to customer loyalty points and open-loop gift cards (gift cards that can be redeemed in more than one place));    
• introducing an infringement regime (not to exceed $10,000 for an individual, or $30,000 for a body corporate) to "incentivise compliance and enable the Commerce Commission to enforce the new provisions";    
• introducing a suitable transition period (proposed to be 18 months); and    
• imposing an express obligation on providers requiring gift cards to display the expiry date.

Along with these suggested changes, the report also clarified which gift cards and vouchers will be exempt from the three-year minimum expiry period, which includes gift cards and vouchers that:  

• were supplied in substitution for returned goods;    
• are prepaid and redeemable for telecommunication, public transport, electricity, gas or water services;    
• allow cash withdrawals;    
• were supplied as part of a customer loyalty programme (but not where it results in a reduction of customer loyalty points);    
• are used for time-limited events; and    
• are sold on the second-hand market or in relation to charity

What happens next?

The bill progresses to its second reading and, despite opposition from the ACT Party, has cross-party support and is likely to be passed. We will provide further updates on the progress of the bill and any proposed amendments following its second reading.    

If you would like more information about the bill or advice on how it may affect you or your business, please get in touch with one of our experts.

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