Fair Trading (Gift Cards) Amendment Bill

Second Reading

The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General) (16:06): Today, I am pleased to introduce the first of two pieces of legislation which explicitly put the power back in shoppers' hands and reform our current consumer protections. The bill amends the Fair Trading Act 1987 to require that any gift cards sold in South Australia must have a minimum expiry date of three years. This policy was overwhelmingly supported throughout this year's state election and is part of the Marshall government's 100-day plan.

A gift card is a good substitute for giving someone cash and, sensibly, should have the same longevity as cash. Further, a gift card is meant to be a gift for the person receiving the card, not the retailer from whom it was purchased who receives the benefit if the consumer is unable to spend the entire value of the gift card in time or at all. As many members know, consumers often do not have sufficient time to redeem the full value of a gift card with the current system and there are inconsistent rules applied from shop to shop.

The terms and conditions of gift cards vary greatly, with the time frame of expiry dates typically ranging from three to over 12 months, so it is unsurprising that many consumers find that they have run out of time on their gift card. Again, it is unsurprising that this supports the perception that the current system unfairly favours businesses and unfairly treats consumers. I understand that some larger companies, such as Apple and Bunnings, have set a higher standard by offering gift cards with no expiry, where consumers can consider the credit similar to cash, but this is not the norm.

This reform makes gift cards more consumer-friendly by ensuring that any gift cards sold in this state have a minimum three-year expiry date. The bill also contributes to the government's priority of modernising regulation by proving greater flexibility and certainty for consumers who are often confused by the varying rules in relation to gift card expiry dates. For consumers, the legal protection currently provided is limited to a situation where an expiry date is considered unreasonably short or where there are particularly unfair terms and conditions for gift cards, severely limiting where compensation can be sought.

The government's view is that, while some retailers will honour a gift card that is out of date, it should not be a matter of discretion and that consumers are entitled to a consistent approach across the retail sector. The bill will achieve this. The bill reduces the detriment caused to consumers when they are forced to redeem gift cards and make purchases that they otherwise might not, simply because of a looming expiry date. It also reduces the financial loss experienced by consumers who do not redeem their gift cards at all, simply because they have been unable to find something that they wish to purchase within the period of time that the gift card is valid.

According to consumer advocate group Choice, Australians spend approximately $2.5 billion each year on gift cards. An estimated $200 million of this is lost in unredeemed gift cards. Members I am sure, and I am probably like many of them, have a few unpresented gift vouchers sitting in a drawer with an expiry date on them for service or products no longer accessible. I should remind members that this bill does not act retrospectively so, unfortunately, its passage will not enable you to dive into the bottom drawer, find all those vouchers and rush off to redeem them, just in case you thought you were going to have a big year of massages, free candles or something.

The bill eases the pressure placed on consumers by increasing the period of time in which they have to redeem their vouchers, ensuring that they get what they pay for and are more likely to make purchases that they can benefit from. On 31 March 2018, similar reforms commenced in New South Wales, mandating a minimum three-year expiry date for gift cards. The New South Wales reforms were widely supported for providing a fair balance between the rights and obligations of consumers and businesses.

The New South Wales reforms prescribe a number of categories of exemption, including loyalty or reward programs, temporary marketing promotions and vouchers supplied for charitable or fundraising purposes. Subject to the passage of the bill through parliament, targeted consultation will be undertaken to prescribe similar exemptions in South Australia by regulation to ensure the needs of both businesses and consumers are met with minimal disruption.

It is noteworthy that the federal government is currently investigating the feasibility of national reforms that would bring all jurisdictions in line with New South Wales. Until this occurs, the proposed South Australian amendments are limited in the same manner as the New South Wales reforms with respect to online and over the phone purchases where the gift card is delivered to an addressee outside South Australia, or where the consumer's contact details include a residential address outside the state.

Only last week did I formally alert my counterparts in the national Consumer Affairs Forum of SA's action to reform gift cards. It is a credit to South Australia that we act as a leader in this field by adopting reforms that are consistent with those recently introduced in New South Wales, to minimise varying and complex regulation across the jurisdictions. Simply put, these reforms will streamline the diverse practices of businesses and achieve greater confidence, consistency and fairness for consumers.

The impact on business is anticipated to be negligible, and transition costs are likely to be minimised for larger businesses already operating in New South Wales. Consumers deserve to get what they have paid for without time restrictions that limit their purchasing ability by forcing them to make purchases that they do not benefit from or by preventing them from redeeming their gift cards at all, which results in some businesses retaining the cash without consumers ever receiving a good or service that has ultimately been paid for.

I am pleased to be able to introduce this Marshall government reform that will assist countless South Australians in the government's first 100 days, and I look forward to support in both places for this important consumer reform. Again, I commend the bill to members, table a copy of the explanation of clauses and invite members to its serious and favourable consideration.

Debate adjourned on motion of Mr Mullighan.