Who doesn’t love getting a gift card! They are a great way to choose your own gift as they provide flexibility to choose what you would like and guilt free shopping! Almost all of my retail clients offer gift cards as a purchasing option within their business. They can be an effective way to offer your customers a gift giving experience with flexibility whilst increasing customer loyalty and potentially attracting new customers.
However in the near future there may be changes to the laws relating to gift cards.
With Dick Smith Electronics going into voluntary administration, many of its customers have been left with Dick Smith Electronics gift cards that the company will no longer to honour.
While those customers who purchased the gift cards from Woolworths and Coles have been able to exchange the cards for alternative store cards (Woolworths/Coles), customers who purchased a Dick Smith Gift Card directly from the retailer have been left out of pocket – gift card holders are considered unsecured creditors.
Currently the ACCC has guidelines on gift cards and their terms and conditions. However, politicians are now calling for more stringent law reform in this area due to a perceived lack of consumer protection. Independent Senator for South Australia, Nick Xenophon, suggested that funds used to purchase gift cards should be held in a separate account on trust for customers, to ensure that they may get their money back. This could affect many smaller businesses who don’t have the means or resources to operate and manage separate accounts and trust systems.
The proposed reforms will be introduced into the Senate next month in hopes to restore consumer confidence in gift cards. Retailers should keep an eye out for these proposed reforms, as they may change the way you choose to offer gift cards. It is also helpful to note that Consumer Affairs Victoria has an information page dedicated to gift vouchers and gift cards that may be of assistance.
If you want to chat about your customer loyalty scheme or gift card offerings and their legal requirements, don’t hesitate to contact me on or 1300 033 934 for a no-obligation chat.