New gift card rules
LEGAL NEWS
Over the past five years major retailers have seen an increase in gift card purchases. This is due in part to their universal uses. Gift cards can range from clothing to electronics purchases, from special services to movie passes. They are convenient, easy to wrap and a great idea for last minute shoppers struggling to find that perfect gift.
Some businesses place expiry dates on gift cards in order to encourage card recipients to use them within a reasonable amount of time. This is not popular with consumers because they feel pressured to use them, and at times, the expiry date comes up before they have an opportunity to use the gift card. Because of this many businesses now provide cards with no expiry date, so it pays to shop around. Some governments are passing laws that limit the use of expiry dates on gift cards.
Nova Scotia's new gift card law
The Nova Scotia government recently announced that new regulations on gift cards and gift certificates, made under Nova Scotia's Consumer Protection Act, will come into effect on February 1, 2010. The new rules ban gift card expiry dates and service or dormancy fees for gift cards. There are a few exceptions. Gift cards designed for charitable, marketing, advertising or promotional purposes are exempt from the new rules. Businesses are also allowed to charge a fee to replace a lost or stolen card, or to customize a gift card. The rules do not apply to prepaid telephone cards or to prepaid credit cards such as Visa or Mastercard.
Tips for Consumers - Read the small print on the gift cards before you buy. These are the various term and conditions for using the card. Make sure that you clearly understand them.
- Before you buy the card ask the retailer if he or she will honour expired cards - especially if the expiry date is before February 1, 2010
- Make sure the person you are giving the card to knows if there is an expiry date, especially if it is for a good or service (eg. a massage at a spa) with no dollar value on the card, and you purchase(d) it before February 1 2010.
- It is your responsibility to ensure that you know the expiry date on a gift card.
- Find out if the business has a gift card refund or return policy
- Many businesses do not put an expiry date on cards so it pays to shop around to find these businesses.
- The business should provide contact information so that you can get more details about the gift card if you need to.
- Gift cards purchased on or after February 1, 2010 will not expire
Tips for Businesses - As good customer relations and as a service to your customers do not place an expiry date on gift cards
- Ensure that the terms and conditions are clearly stated and provided in writing to the consumer at the time of purchase. For example, provide information about any restrictions on using, redeeming or replacing the card, including any fees. A gift card should clearly detail any return policy for purchases made with the gift card, and should list contact information so consumers can check the card's balance.
- Review the new regulations and ensure you are complying with them in your business by February 1, 2010.
For more information consumers or businesses can contact Service Nova Scotia and Municipal Relations at www.novascotiagiftcards.ca, or call 1 800 670-4357. For further information on consumer protection generally visit Canada’s Office of Consumer Affairs (OCA) through Industry Canada at www.ic.gc.ca.
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