Let's Get Rid of Gift Card Expiry Dates

Nitro on 09/09/2016 - 10:04
Last edited 09/09/2016 - 10:18 by 1 other user

We've probably all thrown out a few gift cards that have expired. And probably all thought at the time, there is no logical reason for them to have expiry dates. (other than for businesses to make extra money for nothing).
During my current email discussion with a certain cinema chain over their expired egift vouchers, I discovered that back in 2007 Canada banned expiry dates and fees on Gift Cards as they obviously recognized there just is no valid reason for it. So there is certainly a precedent for it

Let's do the same here!

I was looking to start a petition, but found this one already going, and thought who better to share it with and get some more signatures than the community of OzBargainers.

https://www.change.org/p/consumer-affairs-department-stop-gi…

• 

  scrimshaw on 09/09/2016 - 10:13

  +4

  Already done before!

  Source
  http://www.smh.com.au/business/use-it-or-lose-it-no-change-t…

  AN OFFICIAL review has rejected calls for expiry dates on gift vouchers to be banned, saying there is no strong evidence that tougher rules would help consumers.

  Up to $2.5 billion is spent on gift cards each year but Choice has reported that more than half of consumers have at some point found themselves holding a card that had expired before the full value could be redeemed.

  With most cards expiring after 12 months, the federal Treasury launched an inquiry into the need to further protect consumers, after recent moves overseas.

  Gift cards in the US must be valid for at least five years.

  But the review, published yesterday, said there was no need for a ban on expiry dates or rules to give people more protection when retailers go bust. While it acknowledged the concerns about expiry dates, the review said existing fair-trading laws provide enough protection, and changing the rules could inflate retailers' costs.

  • 

    poboy on 09/09/2016 - 10:31

    +2

    There is no evidence that this would help customers? Really?

    Meanwhile at Coles HQ: "Well done Morris. That dinner chat with the treasurer yielded a great result to protect our bottom line. Your bonus is secure."

    As an aside Kudos to Bunnings for not having an expiry date.

    • 

      Diji1 on 09/09/2016 - 13:37

      -2

      Don't forget that to get to the Treasurer Coles had to pay ten thousand dollars to buy a ticket to what is effectively a court (in the sense of power - courts aren't just a feature of royalty) however they usually call it a dinner or lunch of some kind. At the court the Lord Coles explains to the Prince Minister how they want things to turn out and here we are with the announcement that stopping consumers losing money to big business is not good for the consumers.

      Don't forget that if you pay attention to the news the Liberals are simultaneously celebrating a Labour Senator resigning due to taking money from the Chinese gummints - while at the same time championing the "rights" of foreign gummints to pay money to play in the aforementioned court. This means that foreign gummints have more access to power than the Australian people. Well, the Australian people that don't have ten thousand dollars a year to throw around on making gummints do what they want.

      Democracy in Australia is well and truly gamed.

  • 

    Nitro on 09/09/2016 - 10:47

    +1

    'changing the rules could inflate retailers' costs.'
    ….by making them have to provide the service or product that someone already paid them for sometime in the past. Yeah, that would really suck for them.

  • 

    Nitro on 09/09/2016 - 11:06

    +1

    'Already done before!'
    Does this mean we can't try again? That was several years ago.

• 

  DarkOz on 09/09/2016 - 10:19

  +6

  Let's learn when to buy gift cards and how to use gift cards in time.

  • 

    Nitro on 09/09/2016 - 10:51

    +2

    Personally I don't encourage gift cards for anything but discounts etc, as cash would be infinitely better as a gift but unfortunately many people insist on gift cards as they are perceived as being having more thought put into them as a gift than cash.

    • 

      DarkOz on 09/09/2016 - 11:41

      -1

      The gift card system itself is not the problem. People not using it properly is the real problem.

      I actually think that giving cash is more thoughtful than giving gift cards. One of the main reasons people give gift cards is because they don't have to think about what to buy. I don't see that being thoughtful at all.

      • 

        Nitro on 09/09/2016 - 12:20

        Absolutely. It is ironic that if people thought about the gift more, they would realise cash is a much better gift. But unfortunately some people seem to think cash is the 'lazy' gift and a gift card is more thoughtful.

      • 

        coco1458 on 09/09/2016 - 14:31

        @Nitro: I guess people think that walking into a store to pick up a gift card is more thoughtful than going to an ATM. hahaha

• 

  tomsco on 09/09/2016 - 10:27

  +4

  I disagree.

  While some businesses have been kind enough to drop the expiry, in doing so, they're allowing a liability to infinitely sit in their books. Lost gift cards could compound to a huge hit against the businesses value over a number of years.

  Additionally, by setting an expiry, it gives a business a better grip on managing their cash flow. Say you bought a gift card 10 years ago for $1000. If you go spend that today, you can be guaranteed a business has not budgeted for that cash flow wise. If lots of people do that, suddenly cash will start dwindling within the business, putting it under strain.

  A better alternative would be for gifters to either buy you a real present, and not this quasi-cash, or just give you cash. As an OzBarganier, the only purpose a gift card should have is if it's purchased at a discount (or through rewards points).

  • 

    Nitro on 09/09/2016 - 10:59

    Whilst I completely agree the better alternative is people to stop giving gift cards, and do cash instead, unfortunately that is unlikely to change.
    I'm pretty sure most people realise they have expired cards within months of it expiring, so they wouldn't be sitting around for 10 years. But the businesses already have been paid for these services/products so it isn't like they have to provide something for free now and therefore taking money out of the business' hands. It is just reducing the amount of money the business would claim as 'free money' every time a gift card expires.

    • 

      poboy on 09/09/2016 - 12:25

      Putting the consumer to side for one second - Tomsco's point was from the business perspective.

      It's difficult to apportion the liability of the cards to a given year. Big stores would have % data around when these cards are likely to come in - then apportion the liability accordingly. Smaller stores wouldn't have this, which would potentially cause a large issue.

      • 

        Nitro on 09/09/2016 - 13:05

        +2

        That doesn't really make sense to me.
        All that will really happen is the amount they apportion and budget for each month would increase slightly. (to allow for the fact more cards are being used, and not thrown away). So yes, for the business they are making less profit on the gift cards, but only because they are no longer getting as much money for nothing.

        If you took for instance a smaller store. Let's say a hairdresser. If now they sell 30 gift cards a month (with 12 month expiry), and an average of 20 of them get used each month. With no expiry, maybe that goes up to an average of 25 or even 30 a month. The only reason that there would suddenly be a cash flow issue, is that one month suddenly has way more than average (lets say 60 or 90) being used.
        But:
        1) There is nothing stopping that same scenario happening now, with expiry dates.
        2) If you suddenly have a peak one month, you would inevitably have a lull another month to average it out - Remember they have already been paid for all these so they CAN"T EVER have to give away more services than they have already been paid for into their cash flow in the past
        3) It will all even out over time exactly as it does now, just that the amount of vouchers unused would likely be less
        4) the only way it affects cash flow is because they are currently counting on the fact that x% will not be redeemed, and with no expiry, would have to budget a smaller % not being, and why should we feel sorry about that?

        There is just no way you can justify why we should say to business that we accept the fact that you can take our money now, put it into your assets, then have them say that if we wanted to redeem it 13 months from now that would be a problem for their cashflow….

        When you deposit money in the bank, does it expire? No. Yet if everyone wanted to withdraw it at once, it would be a problem. Yes. But is? No, because everyone doesn't withdraw it at once. Same as giftcards. They would still be redeemed throughout the year, just as they are now. I can't see how people think removing (or extending) an expiry would mean a sudden influx.

      • 

        goodcopbadcop on 12/09/2016 - 03:45

        -1

        @Nitro: So all Gift Cards have a number, and that number should be reconciled to a certain store if it is a chain. If it is a smaller business then they should be numbering their gift cards and keeping a record of the cards being redeemed on a spread sheet at least. Essentially they receive the money - it is a forward payment and if they choose to use that money and place it into their general coffers, pay bills with it, or use it to pay staff etc then it will be their cash flow problem if too many people choose to redeem their gift card in the same month. The business has received the money and had the use of that money prior to the card being redeemed. Isn't this about business's ability to manage their cash flow? They should either hold the money in another account for safe keeping to draw down on when the card is redeemed or at least make a note of the cards's number when bought and account for this $ value in the financial accounts. If a business is going to offer gift cards then they need to allow for and actually have an expectation that the person has the right to redeem it at anytime. So let's not go setting up special considerations for businesses who don't mind receiving the money for gift cards but then spend the money and forget that they did actually already receive the money and now it's all gone!

        The only problem for business's cash flow is that they haven't systems in place to set aside the money and it comes as a huge shock somewhere down the track when a person comes in to their business to redeem the value of their gift card. And even if every gift card owner did come in on the same day to redeem - the business has actually already received the money so what is the problem? Lack of stock if they have low stock.

        But learn lessons from the Dick Smith disaster - if the levels of stock are low and you have gift cards - spend them asap. A business that continues to take customer's money knowing that their days are numbered - is stealing. They are taking people's money under false pretensions - and there should be legislation around that.

  • 

    tunzafun001 on 09/09/2016 - 11:18

    Well I think the answer sits in these 2 arguments. I got 2 gift cards for xmas, each with a 3 month expiry date. The 'gifters' didn't realise there is no store within 400km of my place, and I used none of them. I will actually be going to the said store this week (7 months down the track).

    The argument above is based on 10 years, so lets just make it a minimum of 3 years. Every business should be able to manage a 3 year cycle. The Gift card segment gets it's own budget line that cannot be drawn upon in any way until 3 years is up. As a consumer, if you haven't used it in 3 years, then you probably never will.

    • 

      tomsco on 09/09/2016 - 11:21

      The 'gifters' didn't realise there is no store within 400km of my place

      Haha. It would be funny if these are the sort of people that give gift cards because they believe they are more thoughtful.

  • 

    Diji1 on 09/09/2016 - 13:40

    -2

    How is getting paid in exchange for a gift card a liability? Do you understand the words meaning?

    • 

      tomsco on 09/09/2016 - 14:10

      +2

      Wait… Are you responding to me? I'm an accountant, so yes. I think I know what a liability is.

      Let me give you the definition the Australian Accounting Standards Board use:

      "Liabilities" are the future sacrifices of economic benefits that the entity is
      presently obliged to make to other entities as a result of past transactions or
      other past events.

      Substitute economic benefits for sale of inventory and past transactions with sale of gift card.

      Do you understand the words meaning?

• 

  Sunny84 on 09/09/2016 - 11:15

  Its a load of bullshit that theses companies have been getting away with it for this long.

  I've heard all the reasons for the expiry date i.e. account keeping cost etc.. but they fail to mention how much they profit by interest, unused credit, lost cards etc..

• 

  dbareis on 09/09/2016 - 12:09

  They are stealing our money. They know that a lot of gift cards get lost or forgotten.

  To handle the liability they should extend the expiry to something reasonable (5-10 years) and then they can donate the expired money to charities (don't keep it).

  Another alternative is to allow you to register it and most of us have smartphones these days or computers to keep track of them. I will now check to see if someone has written an app for this…

  • 

    poboy on 09/09/2016 - 12:22

    and then they can donate the expired money to charities (don't keep it).

    OK, that's just silly. The business sold a service. They bank the money. If a person chooses not to use the service, the person is responsible.

    Another alternative is to allow you to register it and most of us have smartphones these days or computers to keep track of them. I will now check to see if someone has written an app for this…

    Google Keep, Evernote or any calendar program will do this.

• 

  cypher67 on 09/09/2016 - 12:22

  +1

  Easy solution - stop buying giftcards unless you are getting them at a discount and going to spend them immidately.

• 

  fruit on 09/09/2016 - 13:38

  Feels like https://www.reddit.com/r/LateStageCapitalism/ in here

• 

  inherentchoice on 09/09/2016 - 13:46

  Oh hai I is selling a speshiul gift card which never expire and you can redeem anywhere in Auzzie. It has Queen and a window on it and I sell yoo this $5 card for speciul price today - onry 10 dorrar!

• 

  Natt on 09/09/2016 - 14:48

  I'll take two inherent choice. As long as you discount them by 50% since I am buying moar than one.