Gift card win for consumers

The Queensland Consumers Association (QCA) has welcomed the federal government’s decision to not allow gift card issuers to charge customers for disputing gift card transactions.

Draft regulations released for comment in October allowed such charges but they are not in the final registered Regulations, which will apply to gift cards supplied on or after 1 November 2019.

QCA, CHOICE and the Consumers’ Federation of Australia all strongly opposed allowing such charges. QCA spokesperson, Ian Jarratt, said “A guiding principle of Australian and international dispute resolution standards is that access to the complaints handling process should be free of charge to the complainant.”

This fundamentally important principle greatly reduces the extent to which consumers may be constrained from making a complaint to a provider of goods/services.

The principle has been adopted very widely in Australia for internal and external dispute resolution processes/schemes and applies to credit and debit cards. Therefore, it was very important to also apply it to gift cards.

However, QCA is concerned about the absence of a specific requirement that the Regulations be reviewed after 3 years. QCA had recommended this because:

  • The legislation covers a very diverse and numerous range of products.
  • The gift card market and consumer needs are changing rapidly.
  • The legislation may result in unexpected/unintended consequences that become apparent soon after implementation.

Ian Jarratt says it is important to monitor the effectiveness of the gift card legislation, and to make required changes early rather wait until the statutory 10 year “sunsetting” review.