Dublin, Ireland, July 19th — The Minister for Business, Enterprise and Innovation, Heather Humphreys T.D., today launched a public consultation on gift voucher fees. This follows her announcement on June 12th that the Government had approved the General Scheme of the Unfair Contract Terms (Gift Vouchers) Bill 2018, which proposes a minimum lifespan of five years for gift vouchers.
In addition to the requirement for gift vouchers to be valid for at least five years, the Bill proposes that the Minister for Business, Enterprise and Innovation will have power to make Regulations to set fees for the issue and replacement of gift vouchers, and for inactive balances on gift vouchers. These are commonly referred to as dormancy or maintenance fees.
The purpose of the public consultation is to gather information and views on gift voucher fees to assist the Minister in deciding on the level of fees, if any, that should apply. The first part of the Consultation Paper seeks the inputs of consumers on gift voucher fees and the second part seeks the inputs of businesses.
Commenting on the General Scheme of the Bill, Minister Humphreys said:
“Plenty of consumers buy gift vouchers and plenty of businesses sell them, but without laws to regulate them, this has been a grey area for too long. These proposals are about making things black and white.”
Launching the public consultation, she said:
“In some cases, fees of up to €3 per month are applied to gift vouchers after a year. In effect, this means that a voucher for €25 can be worthless after 20 months. It seems clear that many consumers who receive gift vouchers are not aware of these fees.
“Understandably, consumers feel they should be able to redeem gift vouchers at their full face value, however, the businesses applying these fees claim that they are essential to meet the costs involved.
“I want to get the widest possible range of views on these issues. I would urge consumers, businesses and anyone else with an interest in this matter to respond to the consultation by the closing date of 31 August 2018.”
The Department of Business, Enterprise and Innovation (DBEI) plays a key role in implementing the Government’s policies of stimulating the productive capacity of the economy and creating an environment which supports job creation and maintenance. The Department also has a remit to promote fair competition in the marketplace, protect consumers and safeguard workers.
Note for editors
The General Scheme of the Unfair Contract Terms (Gift Vouchers) Bill 2018 provides that the Minister for Business, Enterprise and Innovation will have the power to regulate certain gift voucher fees after consultation with consumer and business interests.
Consumer and business representative bodies are also welcome to make a written submission.
The consultation period will run till 31st August 2018. Further information on the consultation is available on the website of the Department of Business, Enterprise and Innovation at https://dbei.gov.ie/en/Consultations/Public-Consultation-on-gift-voucher-fees-and-expiry-dates.html
The issue of expiry dates for gift vouchers formed part of a previous public consultation on the Scheme of the Consumer Rights Bill 2015. That Scheme provided for a complete ban on expiry dates and the submissions received on the gift voucher provisions were among the factors that led Minister Humphreys to propose instead a five-year minimum term for gift vouchers. In the Minister’s view, this strikes a fair balance between the right of consumers to receive what they, or someone close to them, have paid for and the need of businesses for commercial certainty.
Progress on the Scheme of the Consumer Rights Bill has been delayed due to the need to take account of European Union legislative proposals for Directives on consumer contracts for the supply of digital content and consumer contracts for the sale of goods. These proposals, which were announced in May 2015 and published in December 2015 overlap very substantially with two of the main parts of the Scheme of the Consumer Rights Bill. In view of the slower than expected progress on the EU proposals, the Minister has decided to proceed with standalone legislation on gift vouchers.
While there is no specific legislation dealing with gift vouchers, gift vouchers supplied to consumers are subject to the provisions of general consumer protection legislation, in particular the provisions of the Consumer Protection Act 2007 on unfair, misleading and aggressive commercial practices and of the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 (S.I. No. 27 of 1995).
Electronic Money Gift Vouchers
Gift vouchers which come within the definition of “electronic money” in the European Communities (Electronic Money) Regulations 2011 and are redeemable in a non-limited network of retailers and service providers are subject to the provisions of those Regulations and to certain provisions of the European Union (Payment Services) Regulations 2018. Among other provisions, the Electronic Money Regulations require an electronic money issuer, at the request of the electronic money holder, to redeem at any time and at par value the monetary value of the electronic money held. Redemption of the fees held in an electronic money instrument may be the subject of a fee in specified circumstances provided the fee is proportionate and commensurate with the costs actually incurred by the electronic money issuer. As redemption fees are already subject to regulation, the proposed Unfair Contract Terms (Gift Vouchers) Bill excludes them from its scope and they are similarly outside the scope of the present consultation.
Gift Voucher Fees
Inactive balance or dormancy fees apply almost exclusively to electronic money gift cards redeemable in a wide range of retailers and service providers such as the One4All and FromMe2You cards and to shopping centre gift cards which are prepaid MasterCard or Visa cards and are redeemable wherever those cards are accepted. All such fees apply after 12 months from the issue of the gift voucher and range from €1.40 to €3 per month. Issuance fees of €2 to €2.50 apply to a small number of mainly electronic money gift vouchers. Though most gift voucher providers accept no responsibility for lost or stolen vouchers, the issuers of electronic money gift cards replace vouchers for fees ranging from €5 to €8.