All New Zealand retailers must now give their customers a minimum of three years to use gift cards bought at their stores under new legislation that came into effect today.
Any business that fails to honour the new three-year window is liable to face a fine of up to $1000, per breach. In serious cases, they may even be prosecuted.
The change is part of the Fair Trading (Gift Card Expiry) Amendment Act 2024, which is now active and came into force on Monday.
It was brought in to prevent retailers from offering short expiries, which often sat at around 12 months in the past, and had long been campaigned for by the advocacy group Consumer NZ.
Communications and campaigns manager Jessica Walker said the law applied to both physical and digital cards and that the expiry date must appear prominently on the card itself.
“Our research has found in the past that about $10 million is going on unspent gift cards every year,” she said.
“That's literally money for nothing to the retailers.”
Walker said Consumer NZ’s research indicated about one in five gift cards had gone unspent.
“What that means is people are receiving gift cards, putting them in their pockets and they're not realising that they've got it until it's too late.”
There were some exceptions to the new rules, she said. including when gift cards are supplied in exchange for goods returned, for transport cards, debit cards, prepaid phone top-ups, loyalty cards, festival passes and gift cards sold for charitable purposes,
Prepaid cards like Prezzy cards do, however, fall under the new rules.
Retailers would be monitored by the Commerce Commission, which holds the power to issue fixed penalty notices — with fines of up to $1000 per breach — and even launch prosecutions.
The Commission’s principal compliance officer Grant McIntosh said retailers have already had time to prepare as the law passed its final reading 18 months ago.
“There inevitably will be some businesses who have not quite caught up with the new legislation and we will look to work with those businesses to ensure that we have the understanding and the right steps in place,” he said.
McIntosh also stressed the three year minimum expiry applied regardless of what the retailer said to the customer.
“Importantly from the consumer's perspective, whether or not the right information is on the card or not, they have a three-year expiry date,” he said.
“A consumer can rely on it whether or not it states that on the card, they can take that to a disputes tribunal if they wish.”
Customers could also report retailers failing to meet the new law by lodging a concern directly on the Commerce Commission website.
“We'll have a look and see and make sure that business is complying with their obligations,” McIntosh said.
Consumer NZ said it would also be monitoring retailers on behalf of shoppers.
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