In New Zealand, the absence of a mandated minimum expiry period for gift cards is out of step with other markets and continues to raise concerns at the regulatory level. Retailers currently have the discretion to set their own expiry dates without established guidelines, which has caused frustration for consumers as some cards expire within as little as six months. Research indicates that one in five recipients lose out due to expiration of gift cards, resulting in approximately $10 million in losses to consumers, often seen as a windfall for retailers.
To address these issues, the government is actively considering the Fair Trading (Gift Card Expiry) Amendment Bill, which was originally introduced on 10 November 2022. The Bill, comprising of five clauses, has passed its initial reading and aims to prohibit retailers from selling gift cards with expiry durations of less than three years from the date of purchase. If passed, the legislation will void expiry dates shorter than three years for gift cards purchased after the enactment, ensuring a minimum validity period. The Bill allows for certain exclusions from the definition of 'gift cards', such as those supplied as part of loyalty programs or prepaid cards for specific services.
This proposed legislation aligns with international practices in countries like Australia, the United States, and Ireland, which have regulations ensuring gift card validity for three-five years. The Bill aims to protect consumers, promote fair practices, and mitigate financial losses associated with gift card expiration in New Zealand.
Some retailers regulated in other markets are taking the decision to adapt to the potential changes by implementing a minimum expiry date on gift cards of three years ahead of potential reforms. With an increase in consumer and media awareness, retailers are increasingly being called out for having short-life gift cards, so brand reputation is another factor considered in taking the decision to make the proactive change to expiry dates.
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