On 2 December 2019 Ireland introduced the Consumer Protection (Gift Vouchers) Act which sets a minimum five-year expiry period for gift vouchers and prohibits any charge for changing the name on the voucher or that the voucher be spent in full in a single transaction. This applies to all gift vouchers sold from 2 December 2019.
The Act follows a long campaign by the Consumer Association of Ireland to regulate the sale and redemption of gift vouchers in Ireland and is designed to offer further protection to consumers. Its introduction is timely given the popularity of gift vouchers during the Christmas period.
The Consumer Protection (Gift Vouchers) Act 2019 (the Act) amends the Consumer Protection Act 2007 (the 2007 Act). The Act came into operation on 2 December 2019.
The Act requires gift voucher contracts between traders and consumers to include a number of required terms (and these terms will be implied into gift voucher contracts that do not expressly incorporate them and will override any contrary express terms).
Failure to do so can result in fines of up to EUR5,000 and / or imprisonment for up to one year per offence (on summary conviction), or EUR100,000 per offence and / or a imprisonment for up to two years (on indictment). Continued breach following conviction can result in further fines, calculated on a daily basis.
Due to the popularity of gift vouchers as Christmas presents, retailers should be aware of the following key provisions in particular in the New Year period:
As set out above, the Act applies to all gift vouchers sold from 2 December 2019 and does not apply retrospectively to vouchers issued before that date. The Act defines a gift voucher as
“any voucher, coupon or other document or instrument, including in electronic form, that is intended to be used as a substitute for money in the payment, in whole or in part, for goods or service or otherwise exchanged for goods or services.”
However, not all gift vouchers are covered by the legislation. The Act provides for exclusions which include, for example, coupons, vouchers supplied under a loyalty scheme and vouchers which constitute electronic money within the meaning of the European Communities (Electronic Money) Regulations 2011 (the Competition and Consumer Protection Commission has confirmed that One-4-all gift cards are considered electronic money cards and are therefore excluded from the Act).
A “gift voucher contract” is defined as a contract by which a relevant trader supplies another person with a gift voucher. In addition (recognising that gift vouchers are frequently given as gifts), the Act provides that where a purchaser gives, sells or otherwise transfers their gift voucher to a third party, then that third party is entitled to exercise all rights under the gift voucher contract on the same terms as the original purchaser.
5 year minimum expiry date
Gift voucher contracts must now include a term that the gift voucher either:
- is subject to an expiry date at least 5 years from the date the contract was entered into; or
- is not subject to an expiry date.
If the gift voucher contract is silent on this then it is deemed to have a 5 year expiry date.
Traders are also required to specify on the gift voucher itself (or on a durable medium provided with the gift voucher) either:
- the expiry date of the gift voucher,
- the date the gift voucher contract was entered into and the period during which the gift voucher is redeemable; or
- that the gift voucher is not subject to an expiry date.
Prohibition on single transaction requirements
Under the new Act, gift voucher contracts are prohibited from including a term requiring the full value of the gift voucher to be redeemed in a single transaction.
Reimbursement of the remaining balance
Where only part of the voucher is redeemed and:
- the remaining balance is EUR1 or more, and
- the gift voucher contract includes a term preventing the remaining balance from being redeemed in another transaction
then the gift voucher contract is deemed to include a term requiring the trader to reimburse the remaining balance to the person. This can be done cash, by electronic transfer or by way of a further gift voucher.
If the remaining balance is reimbursed by way of a further gift voucher, that further gift voucher must have:
- a value equal to the remaining amount on the original gift voucher; and
- an expiry date not earlier than the expiry date of the original gift voucher.
Vouchers for a named person
Where a gift voucher must be redeemed by a named person then the following terms are implied:
- the named person may redeem the voucher even if there is a difference between the person’s name as it appears on the gift voucher and as it appears on their ID; and
- the name on the gift voucher may be amended without any fee or charge.
No limit on number of gift vouchers redeemed in one transaction
The Act prohibits any term in a gift voucher contract which limits the number of gift vouchers a person can use in a single transaction.
Replacement of lost or stolen vouchers
Where the terms of the voucher offer a replacement if it is lost or stolen then the replacement gift voucher will not be subject to an earlier expiry date than the one it replaces.
Terms contrary to requirements not binding on consumers
If a gift voucher contract includes terms contrary to the requirements in the Act then they are not binding on the consumer. However the remainder of the gift voucher contract will continue to bind the parties (if it is capable of existing without the contrary term(s)).
Transfer of gift vouchers
If the original purchaser gives, sells or otherwise transfers a gift voucher to a third party (eg as a gift or present) then the recipient is entitled to exercise all rights under the gift voucher contract on the same terms as the original purchaser.
This legislation provides consumers with additional protections and places further obligations on retailers. The Competition and Consumer Protection Commission has published guidelines to assist retailers with ensuring they are compliant with the new legislation.