Appendix 3: Summary of submissions

• Money does not expire and neither should gift cards. Gift cards are in reality just another form of currency.
• Allowing a retailer to receive money and refuse to provide goods or services is immoral and is analogous to theft.

• Many of the issues that apply to closed-loop gift cards do not apply to open-loop cards.
• There is already regulation in place to protect consumers who purchase open loop cards.
• Expiry dates are required as a condition of being part of the VISA payments facility.

• The design, administration and manufacture of gift cards is far from costless
• The vast majority of gift card balances are redeemed within three months of being issued, with any remaining balance exhausted over the following nine months.
• Retailers that offer two year expiry dates on gift cards report that it is quite rare for a gift card to be redeemed sometime between 12 and 24 months after being issued.
• ANRA acknowledges that members have received complaints from gift card holders, primarily concerning the expiry date of a card or restrictions on use, however, the total number of complaints is extremely small (much less than one per cent) in comparison to the total number of gift cards issued.
• Nominating a gift card expiry date provides the recipient with a greater incentive to redeem the card and place a reasonable limit on the cost of providing supporting information technology and administration.
• Imposing an expiry date also creates a degree of certainty for the issuing retailer, and may have been chosen to reflect the accounting practices within the business
• Minimum purchase thresholds are in many instances a relic of past gift card systems; where gift cards were single use only, or the remaining balance on a gift card was not as easily amended or recorded.
• Some retailers sell gift cards that cannot be used at every channel or service point within the issuing retailer but these restrictions are made known to the consumer.
• There is also an opportunity for increased government-funded consumer education about gift cards.
• Paying interest on gift cards would transform these products from being a promise to redeem for a purchase‟ into a financial product, which would result in the need for significantly more regulatory oversight and compliance costs for retailers.
• The very limited circumstances that ANRA members might issue gift cards in lieu of a full cash refund remain in the interests of acting in good faith.
• There is potential to focus on consumer education about their position in the event of insolvency and therefore consumer understanding of the risks involved in not redeeming gift cards in a timely manner — rather than changing the creditor priority of gift card holders in Australia.
• ANRA's preferred approach is a voluntary code of practice that would include the following requirements:
  • Duration to expiry must be at least 12 months and either an expiry date or issue date (with length of validity) be printed clearly on the gift card or accompanying terms and conditions.
  • The gift card system should allow multiple purchases to be made, with stored value cards recording the decline in value either on the gift card or separately by the retailer.
  • The gift card should be accepted until the balance is zero (that is no low value purchases are excluded)
  • Customers should be able to check the remaining balance on their card after a transaction, or via a request in-person or online.
  • A copy of the key terms and conditions around the gift card use should be provided with the gift card at the time of sale (for example on packaging of the gift card), with full terms and conditions on the retailer's website and provided by the retailer directly on request. These key terms and conditions should clearly list any restrictions on use (for example not for use online, lost or stolen cards policy).
• An internal dispute process should be in place to deal with situations where a consumer thinks the retailer is not honouring the terms and conditions of the gift card.

• In 2011, six major AMPF members issued more than 24 million gift cards which represent an estimated 68 per cent of the total Australian gift card market. These were all closed loop gift cards and represent around 75 per cent of closed loop gift cards issued in Australia. Total spend on these cards was approximately $1.25 billion out of an estimated total market of between $1.8 and $2 billion in 2011.
• According to the Global Prepaid Exchange (GPX)/Retail Decisions Australian Gift Card independent research conducted in 2009, a key factor in deciding to give a gift card is the dislike people have of giving or receiving an unwanted gift which is considered very wasteful in the current economic climate. A gift card allows the recipient to choose a gift they actually want. This is also important to retailers who prefer to reduce the number of gifts returned or exchanged by customers. In addition, 60 per cent of people receiving a gift card believed that it was better than receiving cash. Less than 15 per cent of people disagreed with this proposition. 83 per cent of people receiving a gift card agreed that the best part is the choice such a card offers. 89 per cent believe that gift cards are easy to use.
• For AMPF members, the average level of complaints is around 0.001 per cent of transactions as measured by calls received at merchants' customer service Help Desks.
• Retailers want to provide a positive gift card experience to maximise the potential for future return visits. Any rules or limitations on the card which are too restrictive or any over-zealous interpretation by the retailer would be highly counter-productive to the whole purpose of the card.
• Overall, around 98 per cent of gift cards issued by AMPF members are redeemed before expiry. The AMPF estimates that after allowing for grace periods, less than 0.2 per cent of gift cards issued by its members actually expire without being redeemed.
• Open-loop cards often impose fees and charges which make closed-loop cards a more attractive option for consumers.
• If new restrictions were applied, is possible they will increase issuer costs. If the cost increase was high enough, then potentially closed loop gift cards would no longer be offered free of charge to consumers.
• It is common practice for a gift card to be sold mounted on some form of carrier. This carrier usually has the main terms and conditions printed upon it and also have the website and the telephone number where the purchaser or the redeemer may go to access the full terms and conditions. The retailer intends that the gift card should be given to the recipient while still mounted on the carrier.
• The AMPF believes such a regulation would be counter-productive for consumers. The AMPF data shows that the longer the expiry period, the lower the redemption rate becomes. For cards expiring within 12 months, the redemption rate varies from 98 per cent to 99 per cent whereas for cards with longer expiry dates the redemption rate drops to 97 per cent.

• Young people are common recipients of gift cards and they think that gift cards are a good idea for young people in lieu of cash.
• Most young people are unlikely to complain about their gift cards, but when they do they will usually talk to the retailer or their friends and family.
• 68 per cent of survey respondents experienced some issue when it c
  ame to spending their gift card.
• The most common cause of difficulty experienced by young people is expiry of the card (60 per cent),
• Others experienced difficulties related to specific terms and conditions or closure of the relevant retail outlet
• Having the two year expiry date printed on the card, an on-line registration system, an email reminder system, and a gift card complaint number printed on the card were all suggested as practical measures that could assist consumers.

• The gift card market in Australia is estimated to be reported between $2billion and $2.5 billion with millions of gift cards issued every year.
• All card issuers provide consumer help lines and in Blackhawk's case, (where we issue the card ourselves) we often provide the first line of consumer enquiries via telephone.
• It would appear that many consumers obtain their information from current affairs programs, which regularly fail to provide accurate or timely information on changes in the law.
• Retailers as a general rule are sympathetic to a customer's concerns and will respect a customer's genuine complaint.
• Many retailers, and card programs, including major retailer groups and some of the most popular cards in the market have a very flexible or 'no expiry' policy.
• Australian consumers are generally well versed in terms and conditions and most consumers have an expectation that there will be some conditions.
• The main difficulties with requiring a non-expiring card are:
  • a contingent liability needs to be maintained for gift cards indefinitely as the gift card could be redeemed at any point in the future. This ties up significant funds, audit and compliance costs as well as making these funds un-available to the economy as a whole;
  • expiry dates assist greatly in reducing fraud; and
  • expiry dates assist with anti-money laundering obligations.
• In our experience, many retailers will agree to provide refunds or swap one gift card for another as part of their general consumer satisfaction processes. Most major retailers are well known to extend expiry dates, offer a 'grace period' or re-activate the card, where technically possible.
• In the case of lost or stolen cards, as the purchase of gift cards is usually anonymous, it is virtually impossible to identify the validity of any potential claim.
• In respect of gift cards that have already been sold and activated before the insolvency event, Blackhawk has generally already remitted the funds to the card issuer.

• The secondary market provides increased flexibility for consumers.
• According to our data, 83 per cent of cards spent in first 6 months and around 10 per cent are unredeemed.
• There is a high degree of variation in expiry dates. A standard minimum expiry date will enhance certainty and support educational efforts.
• Terms and conditions should be communicated at point of sale and on the gift card itself.
• Retailers should provide consumers with basic gift card services, including:
  • A customer service contact
  • The ability to check the balance of their gift card online or via the phone; and
  • An avenue for dispute.

• Gift vouchers can assist small businesses in increasing sales.
• Businesses rely on repeat customers and do need to maintain good relations.
• The businesses already have the money so the card should always be honoured.

• Gift cards issued as part of a charity fundraiser can sometimes have a shorter validity than those sold to consumers.
• Costs can rise over time and so expiry dates are required to ensure that prices paid reflect the cost of the service.

• CHOICE supports the move to clamp down on anti-consumer practices relating to expiry and conditions of use in the $1.5 billion gift card industry.
• More than half of consumers surveyed in November 2011 experienced the biggest pitfall of gift cards — it expired before they were able to use its full value.
• Retailer policies concerning honouring expired cards and grace periods are unclear and often rely on the goodwill and/or training of the shopfront worker.
• Some cards disclose issue date and time period for expiry rather than the actual date of expiry, which can lead to consumers misunderstanding terms.
• Some cards do not offer a website or phone number to check balances — it must be done in store.
• Fees are more of a problem with Visa and MasterCard cards.
• There is no evidence that seeking to extend expiry periods would do much to alleviate the issue of non-use. It may encourage hoarding of cards.
• Raising consumer awareness of expiry dates will help reduce problems, as will competition in the industry.
• The following approaches may address consumer concerns:
  • Voluntary best practice terms for retailers, perhaps including an accreditation logo indicating compliance with the code.
  • Mandated disclosure requirements that require clear labels indicating when the card expires, not when it was issued, perhaps on the front of the card not the back. A page of fine print terms of conditions seems unlikely to reach or be read by the recipient.

• Expiry dates do not protect any legitimate interests of the traders involved.
• Traders should be prohibited from placing expiry dates on gift cards.
• Unused gift cards are a windfall for traders, and their benefits would vastly outweigh any cost created by uncertainty from perpetual cards.
• The rate of redemption of older cards would be low and would be predictable based on historical data.
• Traders may have legitimate reasons for limiting the amount of change they will give on a gift card purchase. By returning a large amount of change, the costs of the card program may not be covered and margins not achieved.
• Limitations on giving change or similar limitations on how credit can be used should not operate in a way that is unfair or unnecessary to protect the legitimate interests of the trader.
• This will prevent residual amounts becoming stranded on the card.
• Such terms may already be in breach of ACL unfair contract term provisions; however, these provisions are not well understood by many businesses.
• The ACCC should take targeted enforcement action focusing on the use of unfair contract terms in gift cards to bring attention to trader obligations.
• This could be remedied through tailored guidance to traders and consumers on consumer rights regarding gift cards and supporting targeted enforcement action.
• In some cases consumers who purchase airline tickets or motor vehicles from traders that go insolvent are able to claim against a fund to reclaim their losses.
• CCAAC could investigate further the costs and benefits of establishing a similar scheme to protect holders of gift cards when retailers become insolvent.

• Gift cards are just a more restrictive form of cash.
• Consumer protection in this area is deficient when compared to other jurisdictions.
• Companies which place an arbitrary time limit on gift card use are simply taking consumers' money and providing nothing for it, a clearly unfair practice.
• Restrictions on transaction size are designed to prevent customers using what is, in effect, their own money.
• Expiry dates and maintenance fees should be banned
• Apart from the case of insolvencies (an incredibly tiny proportion of the problem), the customer should always be able to receive 100 per cent of the valu
  e that was paid for the gift card, without restrictions.
• Existing legislation has been working for many years in other countries.

• There is some difficulty in redeeming gift cards that are only redeemable at designated stores and not authorised resellers and not online, particularly where significant distance has to be travelled to redeem the card.

• If gift cards are paid for in cash then there should be absolutely no expiry date. Cash does not expire so neither should a gift card.
• Lost or stolen gift cards should not be the stores responsibility or fault.

• There is no reason for gift cards to have an expiry date.
• The fact that it costs the seller money to administer the scheme should surely be offset by the interest they would earn on the money waiting to be spent plus the money that is never redeemed.

• Gift card should be treated as cash with no restrictions or expiry dates.
• As there is no discount or bonus when using a gift card there is no reason to limit usage or apply an expiry date.

• The only reason for expiry dates would seem to be to provide the trader with a windfall.
• If an expired card is presented, the issuer should repurchase the card for the face value.

• Retailers are making a fortune out of expired cards — they take the money don't give anything in return. This is a loophole that needs to be closed.
• Consumers do not see a reason for an expiry date on gift cards, they are given as a cash equivalent and should be there to use at the consumer's convenience.
• Often expiry date information is too small to notice and most people are unaware that gift cards have an expiry date.

• Gift cards should always be redeemable for their original purchase price and should not expire.

• Gift vouchers are the life blood of small business when it comes back to profitability.
• People buy gifts and give them on the terms clearly laid out on the voucher.
• Recipients are aware of conditions but through complacency do not always adhere to the conditions.
• Good business practice is to alleviate and help the customer.
• Cash flow is the essence of small business. Business cannot afford to account for income on an unused basis as they are essentially bringing income forward by the advanced sale.
• Regulation risks being bureaucratic such that small business will no longer issue gift cards
• Any regulation on expiry dates should be limited to a 12 month expiry date with the conditions clearly and legibly explained.

• If a gift card is purchased for the same value as store credit then the gift card should be treated as cash and should not expire.
• If the issuer of the gift card wishes the holder to utilize the card within a certain time frame they can add an incentive to the card to encourage the user to act within a certain time frame.
• If you lose a gift card it should be the same as losing cash.
• Where the gift card is for a special offer for a limited time the buyer should be able to use the purchase value of the card as a credit towards the normal price.
• There should be no limitations on using residual balances.
• All terms and conditions should be on the card and on the attached paperwork which is to be kept separate.

• A gift card should be treated as though it is cash regardless of when it was purchased.
• Gift cards should not have any restrictions applied when it comes to redeeming them.

• Open loop, scheme based prepaid cards are considerably different products from those producing the consumer issues that the Committee wishes to investigate and do not require further regulation.
• Being open loop, scheme cards can be used at most merchants (including online) and card balances can normally be supplemented with cash to complete transactions.
• Cash can typically be withdrawn at ATMs.
• Cardholder's counterparty risk (in the case of insolvency) rests with the issuer, not a particular merchant, even if the card carries a merchant's brand.
• Generally, under the Corporations Act these types of products are considered financial products and issuers must hold an Australian Financial Services Licence (AFSL), or hold authorisation from a licence holder, in order to Deal or Advise in relation to them.
• This regulatory regime provides sufficient protection.

• Over-regulation of the gift card industry will create burdensome and expensive compliance requirements on gift card issuers.
• Gift cards are simple and well understood product..
• The adoption of burdensome compliance regimes will potentially dilute the gift card industry (especially for small retailers) or cause gift card issuers increase their fees and charges to cover the compliance costs.
• Following the Canadian laws and imposing minimum expiration dates will impose significant costs to gift card issuers due to:
  • gift card issuers being required to maintain contracts and legal arrangements with third party suppliers (such as settlement providers and gift card system providers) for an indefinite period of time. This is an impractical and burdensome requirement; and
  • the ongoing financial burden on gift card issuers' balance sheets (including potential financial reporting requirements and taxation and accounting issues).
• Gift cards that are open loop may have restrictions on low value use. These restrictions are usually imposed by the individual merchants who are not related to or associated with the gift card issuer.
• There is very little variance between the terms and conditions of gift card products in the market place.
• Gift card issuers may be able to issue a replacement gift card if the cardholder knows the gift card number. In our view, cardholder's are well informed that they should treat the gift card like cash.
• There is also the potential that gift card issuers will struggle to receive funding from commercial entities (such as banks) if they issue gift cards were gift card holders entitled to preferential treatment in the event of insolvency.
• In lieu of fees, the breakage earned by gift card issuers is how gift card issuers recover their expenses associated with administering the gift card products.

• If the card is for a store credit there should be no expiry date — it is the equivalent to money which has no expiry date.
• If a card for a particular service expires it should revert to a store credit to the value of the original purchase.
• Alternatively, gift cards could be refunded to the purchaser on expiry less a small processing charge.
• The cost of providing the cards is offset by the benefit to the organisation that the recipient must buy from only that organisation.

• Gift cards have been used as payment for labour. This is problematic where they expire.

• The cost of a good or service may increase over 12 months; however, the cash value should be honoured indefinitely.
• Some gift cards for services can only be redeemed at the least popular times (excluding weekends) even though the same service was available for that value at any time.
• If the receive
  r genuinely does not want a specified service they should be offered either a cash refund or choice of another service of equal value.

• Some gift cards cannot be read, or are not activated properly and cannot be used.
• Some businesses have grossly inadequate processes for managing the balance on cards, for example by reissuing a new gift card and providing cash to deal with remainder balances.
• Gift cards should be regulated so that they do not have expiry dates or other restrictive terms and conditions.

• N/A

• The retailer has been paid in full and there is no reason for any gift card to expire.
• Gift cards can leave consumers unaware what the unused balance is.
• Small balances should be refundable.
• Many retailers have complex rules regarding how fast the unused balance expires.
• Any conditions affecting unused balances should be clearly disclosed on the face of the gift card.

• There are significant differences between cards that provide a store credit that can be used in exchange for any goods at a nominated retailer and cards or vouchers that can be exchanged for a specified experience.
• In the case of a voucher for an experience a 12 month expiry date is fair because it allows the issuer to control for increases in the cost of providing the experience.
• However, the current practice of imposing expiry dates on cards for store credit is unethical, as is any attempt to restrict the purchases that may be made using the gift card.
• The policies that applied after some recent insolvencies are unfair.

• Gift cards should not expire or have restrictions put on them.
• The money paid for gift cards does not expire, so gift card balances should not expire.

• If a business issues gift cards those cards should be seen as a liability for the company. This liability should be met irrespective of any expiry date.

• $150 gift voucher could not be redeemed due to insolvency. Will not purchase them in future.

• A gift card is the purchase of store credit ordinarily for use as a gift.
• Revenue from expired gift cards arguably consists of a form of unjust enrichment.
• Unless business can show a significant consumer benefit to the application of expiry dates they should be prohibited.
• It should be possible to redeem small amounts for cash; 

• Expiry dates and other branding information that is clearly labelled on the face of the card may assist consumers in redeeming their gift cards.
• Cash does not have an expiry date; these cards are supposed to be as good as cash.
• There is often no flexibility or goodwill extended by some retailers.
• There have been some difficulties in contacting gift card operators using telephone numbers provided on the back of gift cards.

• There are some objectionable terms and conditions associated with gift cards
• Consumers expect gift card will be treated like cash.
• Some retailers intentionally hide some of the less palatable terms and conditions from the purchaser.
• Terms and conditions should be visible at point of sale (not behind counter) and salespersons should be required to indicate the expiry period.

• The issuer takes cash for the gift card purchase and the cards should be returnable for a cash refunds.

• If a gift card is purchased then the full amount should be honoured without any time constraints.
• These monies are held in trust by the company for the benefit of the cardholder.

• Gift card should not have an expiry date and should be the same as cash.
• It is better to just give cash, there are no restrictions and rules attached to it.

• Although frequently characterised as a form of 'store credit', it is arguably more fitting to describe gift cards as a form of prepaid instrument, the value of which can be redeemed at nominated locations.
• From both a public policy and economic perspective, we strongly believe that greater adoption of open-loop products will substantially alleviate most limitations inherent in closed-loop systems, including, most importantly, those associated with the risk of insolvency.
• In other jurisdictions, regulations that apply to gift cards use strict product definitions and generally reach only closed-loop products. Where open-loop products are covered, there are normally a range of exemptions so that gift card regulations do not interfere with other open-loop products.
• Any regulation relating to gift cards should not apply to open loop cards.
• MasterCard supports the imposition of reasonable fees to the extent there is adequate, clear and prior disclosure of such fees. Such fees provide a means for card issuers, program managers and distributors to secure some return on investment and cover the ongoing administrative costs.

• Having an expiry date encourages consumers to use their gift card within a period of time.
• If gift cards are considered and are to be treated as cash, then it is the consumer's expectation that there is no limit to the value that can be redeemed in any one transaction.
• A consumer who purchases a gift card does not expect the loaded value to diminish over time by deducting fees for redemption, balance enquiries etc.
• The function of the gift card is to enable the consumer to continue to redeem the value on the card at the issuer's store until the value has been used up which is the way that Myer operates its gift card program. Requiring the issuing of change undermines this function.
• Myer gift card terms and conditions are adequately disclosed to gift card purchasers and recipients. Major terms of use are printed on the back of the gift card and the gift card carrier and refer to the location of the full terms and conditions. Full terms and conditions are available on the website.
• However, Myer does not consider gift card terms and conditions to be a major consideration for a purchaser or receiver of gift cards in their selection between different gift cards.
• Consumers generally have a broad understanding that gift cards are a form of cash and can only be used at the issuer's store. In a retail environment, information at point of sale is not always appropriate or useful to the consumer.
• There is no need to regulate. This is supported by the small number of complaints received in relation to gift cards.

• The Australian retail sector is facing the toughest conditions experienced in decades
• Regulation may create further burdens on retailers in terms of education, administration and compliance.
• The existing consumer protection framework provides adequate protection for consumers with any existing problems capable of being dealt with under the generic consumer protection provisions of the ACL and the ASIC Act.
• There is a responsibility for consumers to make themselves aware of the conditions attached to the use of gift cards.
• There is limited empirical evidence available to establish that there is any significant abuse associated with the issue or use of gift cards.
• There is widespread community awa
  reness of the fact that expiry dates are attached to the use of gift cards.
• It would be wrong to single out gift cards and contemplate regulation mandating record keeping and data collection related to unused gift card balances.
• Education, awareness and the formulation of suitable guidelines would be sufficient measures to address the current level of concern.

• Gift cards now represent a significant proportion of consumer spending. CHOICE estimates $1.5 billion was spent on gift cards in Australia in 2009/2010.
• The Queensland Office of Fair Trading reported complaints relating to gift cards were in the top 10 most complained about products.
• The inquiry should be limited to gift cards where the purchaser pays full value.
• A large financial institution estimated that of the $80 billion in gift cards sold in the US in 2006, $8 billion of value would never be recouped by consumers.
• In the US, regulation at a state and federal level provides for minimum 5 year expiry date and limits post-purchase fees. Some states have further protection to ban expiry dates outright.

Recommends:

• the prohibition on display or implementation of expiry dates;
• regulation similar to states and provinces in the US and Canada to be implemented through a new gift card act or through amendments to the CCA; and
• consumer complaint data collected by federal and state fair trading bodies to be made publically available.

• Gift cards are very popular.
• Consumer expectations can be over demanding expecting compensation when a card is up to 6 months passed expiry on a particular offer that related to items purchase in bulk for one-off special sale.
• Government should not over regulate in favour of the consumer because of those few who cheat the system.

• Consumers who spend $50 or $100 on a gift card, should have a longer time to redeem the card.
• Five years would be appropriate.

• Insolvency devalued the gift card given to nephew.
• Expiry dates can be much sooner if the card is re-gifted/recycled.

• The scope of the reform should be extended to include online daily deals which also impose expiry periods.
• Proprietors of online deals are already protected by limiting the number of offers that are taken up. It seems to me unfair to accept people's money for a limited offer and then impose an expiry date as well.

• Research is needed particularly on the incidence and extent of problems being experienced by consumers now, and likely to be in the future, and on possible solutions to these problems.
• Cautions against the use of data on complaints to regulators as the sole or even the main source of information about the extent and nature of consumer problems in this area.
• Some specific protections are needed which take account of the special features of gift cards, including that the fact that the card may have been given to the consumer may reduce the incentive to complain about unsatisfactory conditions, treatment, etc.
• Gift cards should provide:
  • a minimum expiry date of one year; and
  • cash change of up to $10 of any unused value on a gift card.
• Before periods of increased consumer purchases of gift cards, for example Christmas, government agencies should remind consumers about some key issues to consider when buying and receiving gift cards.

• Terms and conditions associated are not made clear to the consumer.
• Retailers should be required to install signs that include a basic summary of terms and conditions that apply.
• The United States 'Consumer Deposit Priority' service may be an alternative to protect consumers who would otherwise be unsecured creditors.

• Serious consideration should be given to adopting the American position.
• Government could contribute to making businesses more accountable and operate with more integrity.

• Government has no ethical right to control business.
• The free market provides the best protection.

• Gift cards sold in regional locations that have limited access to the stores is a contributing factor to the increase in unredeemed cards.
• Gift cards should not be redeemable for cash. The giver chose a gift card not cash. This is an issue between the giver and the recipient, not the retailer and not the Government.
• Extending the expiry period may not make any difference.
• Profit is not budgeted from unredeemed gift cards.

• It is not acceptable that no circumstances or reasons for failing to redeemed cards within a set time limit are accepted.

• While a gift card is unredeemed the goods will get more expensive and the recipient received less for the money stated on the card.
• They should always be able to be redeemed whenever the recipient decides.
• Businesses have no reason to put a time frame on the cards.

• Gift cards should not have expiry dates, and where they do, should allow the consumer to convert into cash with a 10 per cent fee.

• There should be no expiry date — the money has been paid, it should not be possible to void the card.
• There should be no fee or charge for use or redemption of cards.
• Terms and conditions should be attached to the card rather than available elsewhere.

• Existing legislation should prevent gift card issuers from retaining unused gift cards on expiry for example, through Unclaimed Money Acts
• If a bank is holding money and cannot locate the account holder, the money does not become the property of the bank — but is to be transferred to the government.
• Legislation should prevent gift card issuers from contracting out of the obligation to perform the contract.
• The funds could be kept in a trust fund to be claimed when the issuer provides the goods or services.
• Unclaimed monies should revert to the government to be used for public purposes.
• This would also incentivise businesses to encourage consumers to redeem their gift cards.

• CCAAC should adhere to the Guide for Ministerial Councils and National Standard Setting Bodies on Best Practice Regulation which requires a problem to be identified before considering a range of policy options including non-regulatory approaches.
• Consumer complaints should be considered in a proper context by citing the number of complaints as a proportion of the volume of gift cards sold in a year.
• Provided there is transparency on the part of the organisation which issues the gift card — which clearly addresses key matters such as expiry date; restrictions on low value use; fees and charges; and limitations on use — then there is no need for additional regulation by governments.
• It is important that gift cards have an expiry date. In the case of shopping centre gift cards this date is usually twelve months after the date of purchase. The onus should be on the gift card holder to fully redeem the gift card before the expiry date.
• There is no justification for standardising expiry
  dates since this is a matter which can vary from company to company for sound commercial reasons.
• Shopping centre companies which issue gift cards are in a different position to single retailers which do the same. Since the shopping centre company operates as an aggregator of tenants, its costs of administering and maintaining the gift card system are much higher than a single retailer issuer of cards.
• Shopping centre owners would like to be in a position where they could enforce all retailers within the shopping centre to accept their own gift card. Unfortunately, particularly in the case of major retailers (who often have their own gift card system), this not possible. Retailers accept gift cards at their own discretion and in some circumstances block gift card BIN numbers from working via their EFTPOS terminals. It is often the case that retailers without EFTPOS facilities are also unable to redeem the card, Once again this is a matter that is addressed in the terms and conditions of use of the gift card, ensuring appropriate disclosure is made.
• Requiring the issuer of a gift card to offer the customer a cash balance changes the nature of the transaction from being one of a gift card to being one of financial product, which is fundamentally different to the commercial intention of the gift card product.

• There should be no expiry date on gift cards.

• There is no reason for expiry dates on gift cards.
• In the case where a service is being provided there may be a need to charge more for that service after a certain period but the consumer should not lose the value.
• The public need to be protected from companies who put unrealistic expiry dates on gift vouchers.

• Gift cards should not have an expiry date as it should be treated as the same as cash.

• There should be no expiry date or, after a certain period in which the card is not used, the money is returned to the purchaser.

• Most of the problems identified in the Issues Paper relate to closed-loop cards, rather than open-loop cards which have robust consumer protection and product disclosure regulations in place.
• Any recommendations for regulatory reform proposed by CCAAC should relate only to closed-loop cards
• Our cards are valid from between 13 and 19 months. We receive few complaints in regard to expiry. The expiry date is printed clearly on the card.
• The terms & conditions on our cards indicate that change will not be given. Not one complaint about this has been received in 6 years. Any proposal to force merchants to give change on open-loop cards would cause merchants angst, because the Merchant Service Fee (MSF) would be calculated on a higher amount than the purchase amount.
• We will replace most lost/stolen Universal Gift Cards for a fee of $15 to cover administrative costs
• 72 per cent of our cards are entirely redeemed, 27 per cent partially redeemed and 1 per cent wholly unredeemed.
• Open loop cards make money through issuance fees, interest on money held and breakage (unredeemed balances).
• If breakage were reduced, other fees may need to be increased (for example issuance fees, or the fees paid by cardholders for phone calls to customer service or for the replacement of lost/stolen cards).
• Insolvency is less of an issue for open loop cards as the funds are held by the issuing bank.

• In light of the fact that open-loop prepaid products already offer a safe and convenient payment method, any further regulation of open-loop cards would be unnecessary and could reduce flexibility and innovation in the Australian prepaid market.
• Visa supports the clear disclosure of terms and conditions, including expiry dates and fees.
• Consumers of open loop produces are protected from losses arising from the insolvency of particular merchants the value is typically held by an ADI.
• Visa prepaid products allow consumers to use any remaining low valance to make a small value purchase at any merchant accepting a Visa card.
• Visa does not set fee levels, however, the rapid growth of open loop cards in Australia supports the view that consumers believe the fee levels are justified in terms of the convenience and security offered by the products.
• Open loop products rely on the ability to impose reasonable fees. Without this ability there is a strong possibility many open loop issuer would stop offering g these products in Australia.

• Some retailers do not accept shopping centre gift card programs as they have their own proprietary gift cards.
• A list of retailers who accept these gift cards is made available to consumers on the website.
• Issue fees are charged to facilitate the administration of gift card programs.

• Complaint volumes have been relatively very low. Of these 30 per cent relate to expiry dates.
• Complaints about expiry dates are generally the result of the card being forgotten or misplaced rather than misunderstanding the expiry date.
• Most retailers offer a 30 day grace period.
• Terms and conditions generally appear on the packaging provided with the card and on the website.