Gift cards

Making the most of gift cards

A gift card can be a convenient gift or way to pay for goods or services, but it's important to understand how they work. Here are a few things you should know about gift cards.

What is a gift card

A gift card is a card loaded with an amount of cash. It enables you (or the person you give it to) to buy goods and services. Some gift cards can only be used at select retailers, but some can be used anywhere that accepts major credit cards. 

Lost gift cards

If you lose a gift card or it is stolen, you will not be able to replace it. So be very careful with your gift cards and treat them as you would cash in your wallet. 

Expired gift cards

When you receive a gift card check the expiry date. If it's not printed on the card, ask the sales attendant to write it on the card and keep the receipt for the purchase.

You should use the total value of the card by the expiry date as the remaining amount is usually not refundable. You can check the terms and conditions on the issuer's website or on the back of the card.

If you have money remaining on an expired gift card, ask the retailer if they will issue you with a replacement card and transfer the remaining balance to the new card. Some retailers will do this to show their good customer service. If not, the card is no longer any good to you, so you can cut it up and dispose of it. 

Some reloadable cards expire after a certain number of years regardless of when you last uploaded money to the card. Find out more about prepaid or reloadable cards.

Gift cards in NSW

Gift cards and gift vouchers bought in NSW have a mandatory minimum expiry period of 3 years. In NSW there is also a ban on charging any post-purchase fees when redeeming a gift card which would reduce its value, including account-keeping fees and activation fees.

For more information on these changes, see the NSW Office of Fair Trading website. 

Getting 'change' from gift cards

When you buy something with a gift card, the retailer is required to give you the rest of the money back in cash, if they state this in the card's terms and conditions.

If the terms and conditions don't mention getting cash back as change, the retailer may insist on leaving the remaining credit on the gift card or giving you a credit note instead.

What if your gift card retailer goes out of business?

When a retailer goes out of business they usually publicly announce it, so you will see stories about their insolvency in the media. You can also check if they are insolvent by searching ASIC's insolvency notices.

Here are the things you can do when you hold a gift card from a retailer who becomes insolvent.

Make a gift card chargeback claim

If you have purchased a gift card using a credit card, you may have chargeback rights. This means you can sometimes get your money back from your credit card issuer. You should contact the issuing bank, building society or credit union straight away as there are conditions and time limits on making a chargeback claim.

Register as an unsecured creditor

If you have a gift card and don't want to ask the person who gave it to you to request a chargeback, you can register with an external administrator or liquidator as an unsecured creditor. The insolvency process will determine if you get a full refund, a partial refund or no refund at all.

Consider an offer to redeem the gift card

Sometimes a retailer will continue trading under the control of an administrator and the gift cards the retailer sold will be honoured. The administrator may place new conditions on the use of gift cards, like requiring you to spend an additional dollar for every dollar you redeem. If this is the case, you will need to work out if it is worth taking up the offer.

Whether you're giving or receiving a gift card, it's good to know what to look out for and what options are available to you if your gift card retailer goes out of business.

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Last updated: 30 Jul 2018