Minister Humphreys secures Cabinet approval for legislation to put a 5-year minimum expiry date on gift vouchers

 

  • Minimum expiry date of five years for gift vouchers.
  • Ban on requirement for gift vouchers to be spent in one transaction.
  • Ban on cancellation of gift vouchers – or the imposition of charges – where the recipient’s name is registered incorrectly.

9.00am, Thursday, 20th December 2018 – The Minister for Business, Enterprise and Innovation, Heather Humphreys T.D., today (Thursday, 20th December 2018) announced that she has secured Cabinet approval to publish the Consumer Protection (Gift Vouchers) Bill 2018.  The Bill provides for a five-year minimum expiry date for gift vouchers.

Minister Humphreys said:

Every year consumers lose out because their gift vouchers go out of date.

“Part of the problem is the great variation on expiry dates which can range from as little as 6 months to 12 months to 24 months. This often leads to confusion amongst consumers.

“By having a set 5-year expiry date on all gift vouchers, we will provide certainty to everyone involved.

“This has been a real bugbear for people for many years and, of course, it’s particularly relevant now in the run up to Christmas when many of us will buy gift vouchers for family and friends.

“There is cross-party support on this issue and I look forward to getting this Bill enacted in early 2019 so that consumers will have greater protection.”

The Bill also includes two important additional provisions that were brought to the Minister’s attention by consumers during the recent public consultation on gift vouchers. The first relates to cases where traders require a gift voucher to be spent in full in a single transaction. The second relates to cases where traders require the name of the intended recipient of a gift voucher to be provided, and either cancel the voucher if that name is not correct, or apply a charge for the correction of the name.  Minister Humphreys commented: 

“It’s wrong that consumers should have to spend a voucher in full in one transaction. Similarly, it isn’t fair that businesses can penalise consumers simply because of a wrong letter in a name.

“I’m glad that these two issues were brought to my attention during the public consultation so that we can now address them as part of this Bill.”

 

Background

The Department of Business, Enterprise and Innovation published the draft Scheme of a comprehensive Consumer Rights Bill for public consultation on 25 May 2015.  In addition to Parts dealing with the consolidation and updating of the law on the supply of goods, digital content and services and on unfair contract terms, the draft Scheme contains a number of provisions for the regulation of gift vouchers, including a proposed ban on expiry dates in contracts for the supply of gift vouchers. The subsequent progress of the Bill was delayed by the publication later in 2015 of EU legislative proposals on digital content and the sale of goods which overlapped very substantially with two of the four main parts of the draft Scheme. Given the slower than expected progress of the EU proposals, the Minister decided to proceed with standalone legislation on gift vouchers.

On 12 June 2018, the Government approved the drafting of a Bill providing for a five-year minimum expiry date for gift vouchers. The draft Bill approved by Government also included a provision giving the Minister for Business, Enterprise and Innovation power to set fees for the issue and replacement of gift vouchers and for ‘inactive balances’ on gift vouchers (commonly referred to as dormancy or maintenance fees).

Following the Government decision, the Department of Business, Enterprise and Innovation launched a public consultation on 19 July 2018 seeking information and views on the level of gift voucher fees, if any, that should apply. Views were also sought on the proposed expiry date provision. 23 responses were received from consumers. 29 responses were submitted by businesses, business associations, consumer bodies and public representatives.

Using Vouchers in Full in One Transaction / Names on Vouchers

The Bill bans the need for a voucher to be used in full in one transaction. For example, if a consumer has a voucher for €100 but wants to buy something for €50, the shop or provider will not be able to force that consumer to spend it all at once.

The Bill also bans companies from cancelling vouchers if there happens to be an incorrect name or spelling on a voucher – or charging additional fees to correct the name on the voucher. According to feedback from the public consultation, this is a problem that often arises with Airline Vouchers if the name on the voucher doesn’t correspond exactly with the name on the passport.

Fees

The Minister is also seeking to deal with the issue of fees for the issue and replacement of gift vouchers and for ‘inactive balances’ (commonly known as dormancy or maintenance fees).

In the course of drafting the Bill, however, a number of legal issues have emerged on foot of advice from the Office of the Attorney General and the Office of Parliamentary Council, which need further examination.

Rather than delay the Bill while awaiting the outcome of this process, Minister Humphreys has decided to progress the legislation without this provision for now to ensure that the 5-year expiry date and other protections are in place for consumers as soon as possible. It is her hope that she will be in a position to introduce an amendment to deal with the fees issue at Committee or Report Stage.

Current Legislation

There is no specific statutory regulation of the expiry dates of gift vouchers at present.  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. Gift vouchers such as the One4All card which are redeemable across a non-limited network of service providers come within the definition of “electronic money” in the European Communities (Electronic Money) Regulations 2011 and are subject to the provisions of those Regulations.