20th March, 2018

Now’s the time to take a second look at your business gift cards

Whether you run a retail store or eCommerce site, you need to get savvy with the new gift card laws affecting NSW.

These rules will beat the Easter Bunny as they start on 31 March 2018 – and you don’t even need to be based in the state to be affected.

Don’t find yourself on the hook for penalties ranging from $500 to $5500. The NSW Fair Trading Act sets the new minimum term on card expiry dates at three years.

There’s also a ban on post-purchase fees.

The good news is a lot of businesses in NSW have already started offering terms beyond three years, or they even offer no-expiry-date cards.

Any customer who lives in NSW is entitled to these gift card terms.

The details

If your business is based outside NSW and you get an order for a gift card online gift card, make sure that gift card has an expiry date of more than three years from the point of sale if the customer is based in NSW.

The NSW government deems a customer to be in NSW if a customer provides contact and delivery address details which are in NSW.

But here’s where it gets tricky.

If their delivery address is in NSW but not their contact details, the customer is not deemed to be a NSW resident for the purposes of the law. The reverse also applies.

Interestingly, if the customer offers no contact or delivery details that tie a customer to a NSW residence, then the retailer could possibly be pinged under the new laws.

That’s because this amendment places the onus on the retailer to prove that the customer doesn’t reside in NSW.

If the customer can prove to NSW Fair Trading that they reside in NSW and you can’t provide evidence that they don’t, then you’re on the hook.

To be a New South Welshman or not to be a New South Welshman? ‘Play it safe’ is NSW Fair Trading’s advice. Offer the new terms to those customers when where they reside is a grey area.

So … what do I do with these gift cards out the back?

Luckily, there’s a grace period from 31 March to 30 September associated with the new amendment. Businesses can then tackle their existing stockpile of gift cards so long as they make an effort to let customer know about the new terms.

The Big Four tips for your grace-period gift cards are:

  1. physically amend the cards
  2. update the terms and conditions on your website
  3. update your signage near the point of sale
  4. add a note to any receipt issued with the sale of said gift cards

How you spell out the changed terms to the customer is up to you, but it needs to be clear to them that the new terms apply.

Online stores need to be eagle-eyed about their terms and conditions of gift card sales when selling to customers in NSW.

There are a few more exemptions to the new law (EFTPOS cards, for example), so head on over to the NSW Fair Trading page to look at the changes in finer detail.