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Letter of transmittal

Date



Mr Colin Neave AM
Chair of CCAAC
6 July 2012

Australian Government | Commonwealth Consumer Affairs Advisory Council

Dear Assistant Treasurer

At a meeting of the Ministerial Council on Consumer Affairs (MCCA) held on 3 June 2011, Ministers noted concerns relating to the purchase and use of gift card products. On behalf of Consumer Affairs Ministers, the Commonwealth Consumer Affairs Advisory Council (CCAAC) was requested to conduct a review of gift cards in the Australian market.

The findings of this report have drawn on research and consultation following the release of an issues paper. CCAAC invited written submissions from interested stakeholders on issues relating to the purchase and use of gift cards in the Australian market.

Gift cards are a market response to a consumer demand. While gift cards may have some disadvantages when compared with cash, CCAAC has found that on the whole, consumers benefit when giving and receiving gift cards. Gift cards are a convenient option for the gift giver and allow the gift card holder to select a gift that suits their needs.

While this review has uncovered difficulties where gift cards are not used in accordance with the terms and conditions that apply, CCAAC has been unable to find any overwhelming evidence of structural consumer detriment warranting a regulatory response. However, CCAAC accepts that in some cases there may be some dissonance between terms and conditions and consumer expectations, which is exacerbated by the fact that the purchaser is not likely to be the end user, thereby separating the end user from the transaction. CCAAC has found that there may be some scope to explore how existing consumer education activities could be promoted to consumers of gift card products. To assist consumers, CCAAC also encourages industry to develop and promote industry best practices when issuing gift cards.

I offer my thanks to and acknowledge the expertise and commitment of the CCAAC Subgroup in compiling this report. The Subgroup was led by Ms Deborah Healey and Mr Ray Steinwall, together with contributions from other colleagues, as well as assistance from the Queensland Office of Fair Trading, the Australian Securities and Investments Commission (ASIC) and the Commonwealth Treasury. I also thank those who provided submissions to CCAAC as well as those who met with CCAAC throughout the duration of the review.

I am pleased to enclose a copy of CCAAC's final report.

Yours sincerely

Colin Neave

Colin Neave
Chairman, Commonwealth Consumer Affairs Advisory Council.