National law reform needed to protect consumers

A USQ academic believes retailers are making windfall profits on expired gift vouchers and suggests national law reform is required.

USQ School of Law Lecturer Dr Nicky Jones, who researched Canadian and United States consumer protection law in relation to gift voucher expiry dates in 2009, has reviewed statute and common law principles in Australia and the extent to which consumer protection, contract, corporations and sale of goods legislation currently regulates this area.

'It is unjust for retailers to accept consideration for gift vouchers and then refuse to deliver promised goods or services when the vouchers expire,' Dr Jones said.

'Amendments to Australian consumer protection laws along the lines of Canadian and US reforms are needed to protect consumers from losing the benefit of unused and expired gift vouchers.'

Dr Jones’ view reflects that of Queensland Deputy Premier Paul Lucas, who told journalists recently he was meeting with other consumer law ministers to push for national laws governing expiry dates on gift vouchers.

'Gift vouchers are popular amongst consumers; they are convenient and they relieve gift-givers from the time and effort involved in selecting a specific gift,' Dr Jones said.

'They are also attractive to retailers because they create and build store loyalty, reduce the number of unwanted gifts that are returned and often result in incremental sales.'

Dr Jones said consumer data from the USA and Canada indicated approximately one-third of all gift vouchers expire unused.

'For the most part, their holders misplace, lose or forget them until the voucher’s expiry date has passed,' she said.

'Retailers benefit most of all when the gift voucher is unredeemed, with some Canadian and US retailers reporting million-dollar profits from unredeemed gift vouchers.'

If a gift voucher expires unredeemed in Australia, the consumer is powerless to appeal against its expiry or claim the good or service for which the voucher was purchased.

'Neither the Australian Consumer Law nor State and Territory legislation provides Australian consumers with adequate protection for losses incurred as a result of expired gift vouchers,' Dr Jones said.

'Such protection could be readily achieved by amending State and Territory consumer and fair trading laws to prohibit gift vouchers from bearing expiry dates.

'This would provide welcome relief to consumers who find themselves unable to use expired gift vouchers, while preventing the unjust enrichment of retailers, who rely on expiry dates to avoid delivering goods or services promised under their vouchers and who benefit from the expiry of such vouchers.

'If Australian commercial and consumer trends in relation to gift vouchers follow those in Canada and the USA, gift vouchers will continue to provide a growing source of revenue – and unearned profits – for retailers.'

Dr Jones said in contrast to the Canadian and US experiences, the question of consumer protection in relation to expired gift vouchers does not appear to have been raised, much less discussed, as an issue of concern in Australian jurisdictions.

'This may be about to change, following Queensland Deputy Premier and Attorney-General Paul Lucas’ announcement that he would pursue law reforms to protect consumers holding expired gift vouchers at a meeting of consumer law ministers in Canberra,' she said.

'If so, this would be a welcome reform, ensuring that Australian consumers receive the full value of their gift vouchers.'