NZ retailers are raising alarm bells over new legislation that has just come into effect this week, which requires any new gift card being sold to have a minimum expiry date of three years.
Peak body Retail NZ thinks the new rules could cause confusion as both retailers and shoppers get used to the changes, adding that further amendments to the law should be considered.
Guidance released by the Commerce Commission late last month outlined what constitutes a “gift card” and what is considered “sold”, which may come as a surprise to some.
“We have been fielding questions for many months from members about what cards might be captured under these new laws, from ‘buy nine get one free’ coffee cards to vouchers given out as part of loyalty programmes,” Retail NZ CEO Carolyn Young said.
“While we are grateful for the guidance the Commerce Commission published late last month in response to our many queries, some of the interpretations are not what our members were expecting.”
All gift cards and vouchers given out for free are exempt from having a minimum expiry, as are prepaid top-up cards for telecommunication services, public transport, electricity, gas, or water services.
Young said that other prepaid top-up cards, such as those used for laundromat machines or at gaming arcades, are now included in these rules.
While the Commission suggests having no expiry on those cards, retailers that do are now required to print that date prominently on the back and allow at least three years to spend any loaded money.
“Small businesses with these cards often feel they must apply expiration dates to keep their liability in check,” Young said. “This change now causes compliance headaches, as well as putting more debt pressure on SMEs during tough economic times.
“What has also caught some of our members by surprise is the inclusion of bonus gift cards given out with the sale of a specific item. While retailers maintain they are given for free alongside a purchase, the Commission has deemed that they are part of the sale of the product and must now comply with the expiration rules.
“Retail NZ believes neither of these scenarios were intended to be included in this Bill, which is about ensuring consumers have a fair amount of time to spend gift cards bought for them by friends and whānau.”
Retail NZ is calling for an amendment to exclude these examples from the new legislation and will continue to discuss retailers’ concerns with the Commerce Commission and the Government.