Australian Retailers Association battles gift card changes

Internet Retailing

16th Jan 2018

he Australian Retailers Association (ARA) have made a submission to the NSW Fair Trading’s (Fair Trading) consultation on changes to the recently announced regulation of gift cards.

In October, the NSW Parliament passed legislation in October to impose mandatory three-year expiry periods on all gift cards sold to NSW residents.

The changes stand to adversely impact online retailers given the difficulty associated with separating customers in NSW and those in other states given the lack of physical stores.

Red Balloon founder Naomi Simson has previously criticised the move, saying that businesses were not adequately consulted.

Fair Trading has proposed a raft of changes, including exclusions for certain gift card categories (such as cinema vouchers), a six-month transition period, with retailers also to notify consumers of the changes during this time.

With the regulations set to begin in March, Russell Zimmerman, executive director of the ARA, questioned the rushed transition period.

“This early implementation date means Fair Trading’s changes will need to be rushed through Parliament in February – just three months after the legislation was passed,” Zimmerman said on Friday.

“As our members still hold a significant amount of gift cards in stock, whose terms and conditions will soon be outdated, retailers will have very little time to sell these products before 31 March this year.”

Zimmerman said the ARA are concerned the six-month transition period will not allow retailers enough time to offload non-compliant stock, and will be pushing for a 12-month transition period instead.

“After little-to-no consultation before this unnecessary legislation was passed, NSW Fair Trading have only now decided to consult with retailers, completely after-the-fact,” Zimmerman said.

The ARA’s submission outlines the prospect of interstate competition issues, with retailers in other states now exposed to potential penalties from Fair Trading if they sell a non-compliant gift card to a NSW resident, leaving the NSW Government open to legal challenges over trade and commerce restrictions between states.

Zimmerman said this would cause issues for retailers, who will now have to check where a customer lives whenever they ask to purchase a gift card.

“These new regulations will restrict trade and competition between New South Wales and other states, and there is no means of monitoring the use of gift cards across borders,” Zimmerman said.