Gift Cards !

Australians buy $ 1.5 billion worth of gift cards each year and they are a popular gift idea at birthdays, Christmas, Mothers Day, Fathers Day - in fact on any occasion that involves giving a gift.  They remove the onus from the purchaser in actually choosing a present and places that choicer squarely in the hands of the recipient.

Unfortunately, many get misplaced and are never used, and others expire before their full value is converted into purchases.  The majority of gift cards in Australia have a twelve months time limit.   In the United States, this expiry time is usually five years.

It is a reasonable question to ask why there is any time limit on these cards ?     There is no time limit on the banknotes that are legal tender in this country.   In effect, a gift card is simply a substitute banknote.  It's value has been fully paid up front and any time limit on it's use is purely artificial.

Obviously, gift cards that fail to present deliver a huge bonanza for the card company.  They have the money safely in their cash register and get full use until such time as the owner of the card presents it and reclaims it's value.   It is very much in their favour to implement time factors on card use.

Another limiting time factor is the fact that the clock starts from the moment the card is purchased - and this may be well in advance of the time it passes into the hands of the recipient.  Many people do their Christmas shopping weeks or even months ahead of that event, creating a disadvantage of the legal presentation period available.

Time limits on gift cards should interest the department of Consumer Affairs.     This department is tasked with protecting the public from unfair trading practices.  It may not be possible to completely remove the expiry period because many phone or internet transactions that involve credit, debit or gift cards require an expiry date to avoid rejection - but certainly a five year time limit would be much more reasonable than the present twelve months.

Not so long ago most gift cards were open ended on a time basis.   These time limits are a more recent innovation - and they clearly deliver the most benefits to the issuing card company.   It is time that the government levelled the playing field !