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consumer

Gift cards and vouchers: Expiry date rules in NZ

Key Takeaway

New Zealand law does not set a minimum expiry period for gift cards. However, businesses must clearly and prominently disclose any expiry dates and terms to avoid misleading consumers under the Fair Trading Act 1986. If expiry terms are unclear or misrepresented, consumers may have grounds for complaint.

Gift Cards and Vouchers: Expiry Dates in New Zealand

In New Zealand, gift cards and vouchers are a common way to purchase goods or services. While their use is widespread, the rules surrounding their expiry dates can sometimes be unclear. This article outlines the legal position regarding gift card expiry dates, focusing on the obligations of businesses and the rights of consumers under New Zealand law.

No Prescribed Minimum Expiry Period

Currently, New Zealand law does not prescribe a minimum expiry period for gift cards or vouchers. This means that businesses are generally free to set their own expiry dates for the gift cards they issue. However, this freedom is subject to the overarching requirements of consumer protection legislation, particularly the Fair Trading Act 1986 [Source: Fair Trading Act 1986].

The Fair Trading Act 1986 and Expiry Dates

The Fair Trading Act 1986 (FTA) is a key piece of legislation designed to protect consumers from misleading and deceptive conduct by businesses. It ensures that businesses do not mislead consumers or engage in unfair practices [Source: Fair Trading Act 1986, s 1A].

Misleading Conduct

Under the FTA, businesses must not engage in conduct that is misleading or deceptive, or is likely to mislead or deceive [Source: Fair Trading Act 1986, s 9]. In the context of gift cards, this means that any expiry dates or other terms and conditions associated with the card must be:

  • Clear and Prominent: The expiry date must be clearly stated and easily visible to the consumer at the point of sale, before they purchase the gift card. Hidden terms or fine print that is difficult to read may be considered misleading.
  • Not Ambiguous: The terms must be straightforward and leave no room for misunderstanding about when the card will expire.
  • Not Misrepresented: A business cannot imply that a gift card has no expiry, or a very long expiry, if it in fact has a short expiry period. Such an action would constitute a false or misleading representation about the conditions of supply of services or goods [Source: Fair Trading Act 1986, s 13(g)].

If a consumer purchases a gift card and the expiry date is not clearly disclosed, or if the disclosure is misleading, the business may be in breach of the Fair Trading Act 1986 [Source: Fair Trading Act 1986, s 9, s 13].

Rights of Consumers

Consumers have the right to be fully informed about the terms and conditions, including any expiry dates, of a gift card before they complete the purchase. If a consumer believes they have been misled or deceived regarding a gift card's expiry date, they can make a complaint to the Commerce Commission, which enforces the Fair Trading Act 1986 [Source: Commerce Commission, Fair Trading Act 1986].

The Consumer Guarantees Act 1993

The Consumer Guarantees Act 1993 (CGA) provides guarantees about the quality of goods and services supplied to consumers. A consumer is defined as a person who acquires goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption [Source: Consumer Guarantees Act 1993, s 2]. While the CGA covers the goods or services that may be purchased with a gift card, it does not directly govern the expiry date of the gift card itself.

For example, if a gift card is used to purchase a service, and that service is not carried out with reasonable care and skill, then the consumer would have rights under the CGA regarding the service [Source: Consumer Guarantees Act 1993, s 28]. However, the CGA does not specify rules for the expiry of the payment mechanism (the gift card).

What if a Business Ceases Trading?

If a business that issued a gift card ceases to trade, particularly if it goes into liquidation, the gift card may become worthless. A gift card represents a debt owed by the business to the cardholder. In the event of liquidation (the process by which a company is brought to an end, and its assets distributed), gift card holders are generally treated as unsecured creditors. This means they are unlikely to recover the value of their gift card unless there are sufficient assets to pay all other creditors first [Source: Insolvency Act 2006, s 241]. This situation is separate from issues related to expiry dates, as it concerns the solvency of the business rather than the terms of the card itself.

When to Seek Independent Legal Advice

If a business has ceased trading, or if you believe you have been misled by a business regarding a gift card's expiry date, it is advisable to seek independent legal advice. Information can also be obtained from Consumer Protection at the Ministry of Business, Innovation and Employment (MBIE), or by contacting your local Community Law Centres for free legal information and assistance.

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