Grocery giant Woolworths has announced that it is removing expiry dates from its gift cards, as new legislation is set to force retailers to extend expiration dates to at least three years.
While a convenient gift option, the humble gift card is often going unused, with research published in the Consumer Interests Annual showing that between 10% and 27% of gift cards are going unredeemed, often because card-holders forget about them until it’s too late.
With Australians spending nearly $2 billion a year on gift cards, that’s a lot of money down the drain.
The New South Wales government is set to usher in legislation to extend the expiry dates on gift cards to a minimum of three years, as opposed to the current one year expiry date, with Woolworths going above and beyond the legislation requirements by scraping expiry dates all together.
While Woolworths is making headlines in response to the NSW government’s decision, other retailers including Bunnings and EB Games have been issuing gift cards free of expiration dates for the past year.
“After talking to more of our customers about this in recent months, we’ve decided to… scrape gift card expiry dates for good,” said Woolworths Head of Financial Services and Insurance, Chris Cramond.
“It means one less thing to worry about for our busy customers, who will have complete flexibility to use gift cards as and when it suits them.”
According to Australian Competition and Consumer Commission (ACCC) guidelines, businesses must clearly state the expiry date of the gift card or voucher, but they’re not required to honour them after this date, meaning that extending the expiry date will help consumers when it comes to spending.
Woolworths is DITCHING gift card expiry dates following pressure from consumer groups! 💸 pic.twitter.com/syq1mfECV7
— Sunrise (@sunriseon7) March 7, 2018
What does this mean for Australian consumers?
Apart from cash, the gift card is the perfect present for someone who is hard to buy for, meaning it will become much more useful once the expiry dates are extended or abolished.
Currently, gift card legislation is governed by each individual state or territory, meaning that it may be a while before the rest of Australia aligns with NSW’s legislation. However, with the Woolworths decision to abolish expiration date all together, the pressure will be on other retailers to follow suit.
For consumers in other areas, it’s best to keep an eye on those gift cards and talk to retailers before the expiration date if you don’t plan on using them, as some may be willing to extend or pay out the balance of the gift card, although don’t bank on it.