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July 2, 2010
For immediate release

Gift Cards Legislation to Come Into Force on September First

Environment, Labour and Justice

Minister of Justice and Public Safety, Doug W. Currie announced today that new Gift Card Legislation will be coming into effect on September 1, 2010.

“An effective date of September 1 will allow retailers sufficient time to update their systems to become compliant, yet will still ensure that consumers enjoy these new protections during the busy holiday season,” said Mr. Currie.

The Gift Cards Act, which was introduced in the legislature during the spring session, will apply to any gift card issued on or after September 1, 2010. The Act prohibits expiry dates on most gift cards, prohibits most administration fees, and requires clear disclosure of all fees and other terms and conditions. The new legislation will apply to gift cards, gift certificates or any other voucher sold with a monetary value attached. Some exemptions are being made for cards issued for marketing or promotional purposes or cards issued for charitable purposes. Gift cards for a specific good or service, for example, a gift card for a round of golf, will also be exempted.

“This new legislation will protect Island consumers and provide clear guidance to retailers,” said Mr Currie. “My department will continue to work hard to protect the financial interests of all members of our One Island Community.”

Gift Cards and Gift Certificates

Why is the Government regulating gift cards?

Gift cards have become very popular options for consumers. The purpose of the Gift Cards Act is to ensure that consumers get what they have paid for, and that the value of the gift card is not reduced or eliminated through fees or expiry dates. The Act comes into force on September 1, 2010, and will prohibit expiry dates and restrict fees on most gift cards.

Will the legislation apply to gift cards issued before the Act came into effect?

No. The Act and regulations apply only to gift cards bought on or after September 1, 2010.

Can any gift cards still have expiry dates?

The following gift cards may have expiry dates (the reason is noted in brackets):

(a) charitable gift cards (must have an expiry date for income tax purposes);

(b) gift cards for a specific good or service, for example a manicure or round of golf (the cost of a good or service increases with inflation); and

(c) marketing and promotional cards (the purchaser has not paid for the card).

Can any gift cards still charge fees?

The following two types of gift cards will still be able to charge fees for the same reason as they are permitted to carry an expiry date:

(a) charitable gift cards;

(b) marketing, advertising and promotional cards.

What happens if a gift card purchased after September 1, 2010, has an expiry date?

Some stores may choose to use up remaining cards with expiry dates. If this happens, the card remains in effect as if there were no expiry date.

How will I know what fees or other restrictions, limitations and terms and conditions are on my card?

The legislation requires clear disclosure in writing when the gift card is issued.

What if I lose my gift card or it is stolen?

A business can charge a fee for replacing a lost or stolen card. Businesses are not required by law to replace cards.

Are phone cards, pre-paid bank cards and credit card branded gift cards covered under the Gift Cards Act?

No. These cards fall under Federal Government legislation.

Can a business put an expiry date on a gift card for a manicure, a round of golf, a hair cut, or other specific goods and services?

Yes, there can be an expiry date on cards for specific goods or services because the cost of a good or service increases with inflation.

Media Contact: Joanne MacKinnon
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