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If your business sells gift cards you’ll need to comply with new laws which come into effect from 1 November 2019.

New legal requirements for gift cards

There are three key parts of the new gift card laws:

  • The mandatory minimum expiry period for gift cards is now three years from the date the card is sold to a customer.
  • Gift cards must clearly show the expiry date.
  • Post purchase fees can no longer be charged.

Tip: Any gift card sales before 1 November 2019 date will continue to carry the same expiry period and fees as applicable at the time of purchase. The new laws can’t be retrospectively applied to these purchases.

Which gift cards are included and excluded?

The new laws apply to all gift cards and vouchers sold from 1 November 2019 onwards.

The three year minimum expiry period does not apply to gift cards that:

  • can be reloaded or topped up
  • have been donated for promotional purposes (eg. a business running a one day only promotion where all customers are provided with a $10 voucher to use in store on that day only)
  • gift cards or vouchers that are given as a bonus in connection to the purchase of goods or services for use in the same business (eg: customer loyalty programs that provide a $10 voucher if you spend a certain amount in one transaction in store).
  • are only available for a specific time period (eg. free entry to a seasonal event)
  • have been supplied as part of a temporary marketing promotion
  • have been given as part of a customer loyalty program or employee reward scheme
  • are supplied as a genuine discount (eg. buy a $100 product for $60)
  • second- hand gift cards.

Which fees can or can’t be charged?

The following post purchase fees can no longer be charged:

  • activation fees
  • account keeping fees
  • balance enquiry fees.

The following fees can still be charged (if applicable):

  • overseas transaction fees
  • booking fees
  • payment surcharges.

What should I do to prepare for this change?

Review your gift card terms and conditions as well as making a note of where these appear so you can be ready to update them on 1 November. This could include making updates to:

  • your website
  • marketing materials (eg. printed flyers)
  • the physical gift cards and vouchers
  • internal point of sale systems.

What happens if I don’t comply with these changes?

Under Australian Consumer Law, gift cards which don’t comply with the new laws will be considered void and the new legal requirements will apply regardless of what is stated on your gift card.

Breaching the new laws could also result in a fine.

What happens when a business changes owners?

If there is a change of ownership the new owner does not have to honour an existing gift card or voucher, unless:

  • the business was sold as a ‘going concern’ (this means the assets and liabilities of the business were told to the new owner)
  • the business uses a company structure and the new owner has purchased shares in the existing company.

You may, however, choose to honour the voucher as a good will gesture to the customer.

More information

Visit the Australian Consumer Law website for more information on the new gift card laws.

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