Executive Summary. The Consumer Protection (Gift Vouchers) Act 2019 (the “Act”) is the latest in a trend of proliferation of consumer laws. While the new laws on gift vouchers are wide, they do not go as far as may have been anticipated. It is still important for businesses to be aware of the changes in this area and how the Act impacts the rights of its customers.
The new Act was signed into law on 19 November 2019. The Act will impose new rules on the sale of gift vouchers, which previously was not subject to specific legislation. This article will outline the key provisions of the new laws on gift vouchers and how it will affect consumers and retailers.
- Pre-Existing Situation
Until now there has been no specific laws on gift vouchers in the Irish market. Any rules in relation to gift vouchers had to be drawn from general consumer protection laws. This led to confusion amongst consumers due to a wide variety of rules by individual retailers.
There were initial plans for the regulation to form part of a consolidated consumer protection act, but this has been delayed until the completion of the EU’s ‘New Deal for Consumers’.
- Key Provisions
The Act implies a number of terms into contracts for gift vouchers between retailers and consumers. These include:
- Gift vouchers must now remain valid for five years after purchase, unless the gift voucher is not subject to an expiry date.
- Certain details relating to the gift voucher must be provided to the consumer on the voucher or on a ‘durable medium’ (which includes email). These details are the expiry date of the voucher if applicable, the date on which it was purchased, and the period during which the voucher is redeemable.
- If a gift voucher contract contains a term preventing any remaining balance on the voucher from being redeemed, the consumer is nonetheless entitled to redeem the balance in cash, electronic transfer or with a further gift voucher dated no later than the original gift voucher.
- The terms of a gift voucher contract cannot limit the number of gift vouchers that a consumer can use in one transaction.
These provisions will not have retrospective effect on gift vouchers sold before the introduction of the legislation.
- Scope of the Act
The Act applies to vouchers, coupons or physical / electronic instruments to be used in lieu of money for goods and services. There are number of exceptions to the Act, notably: coupons for a specific good at a specific price during specified dates; vouchers under a customer loyalty scheme; vouchers redeemable only for certain services (telephone, internet, fuel, electricity, heating); instruments that were not made available to be given as a gift; and vouchers that constitute ‘electronic money’ under EU law.
Some electronic money instruments are commonly referred to as gift vouchers, for example One4All and FromMe2You cards. However, these are excluded from the legislation because they are regulated under the EU (Electronic Money) Regulations. Under these regulations there can be no expiry date for an electronic money gift voucher as long as a balance remains on the voucher. Electronic money instruments are also regulated under a Central Bank regime.
- Steps for Businesses
Businesses should review their polices on gift vouchers to ensure they comply with the new legislation. For example, businesses should be aware that they are no longer allowed to prohibit the use of two or more vouchers in a single transaction.
The legislation is not retroactive, but business who have printed gift vouchers that have yet to be sold must comply with the new laws when selling these vouchers. For example, if no expiry date is printed on these vouchers, the purchaser must be informed of the expiry date (of no earlier than five years) on another durable medium.
The Competition and Consumer Protection Commission have published guidelines on the legislation for businesses on their website.