Home Knowledge Increased Obligations for Retailers this Christmas with the Introduction of New Gift Voucher Legislation

Increased Obligations for Retailers this Christmas with the Introduction of New Gift Voucher Legislation

On 2 December 2019, the Consumer Protection (Gift Vouchers) Act 2019 (the “Act”) came into force. The Act introduces new rules for traders and enhanced protections for consumers who buy or receive gift vouchers. Previously, gift voucher transactions were protected under general consumer legislation which lacked any specific safeguards. For example, there was no regulation surrounding practical issues with gift vouchers such as expiry dates and outstanding balances. The Act addresses these issues and introduces measures to prevent traders having certain terms in gift voucher contracts.

When Does the Act Apply?

The Act applies from 2 December 2019 and affords protection to gift vouchers only. The Act defines “gift voucher” as including vouchers, coupons or other documents, including in electronic form, that can be used for goods or services instead of money.

When Does the Act Not Apply?

The Act does not apply to gift vouchers purchased before 2 December 2019. The Act also lists the types of vouchers, coupons and other instruments (including electronic) to which the Act does not apply. These include vouchers and coupons that: 

  • fall within the meaning of electronic money under the EC (Electronic Money) Regulations 2011 (SI 183 of 2011) (e.g. one4all vouchers);
  • are designed to buy specific goods or services at a discounted price from a specific trader on a specific date or for a specific period not exceeding 3 months (e.g. Groupon vouchers);
  • are supplied as part of a customer loyalty scheme or promotion connected to a specific good or service; or
  • are supplied as a refund for goods returned to a trader. 

What are the New Rules and Enhanced Protections? 

The Act introduces new terms for gift vouchers contracts between consumers and traders. In brief, these include:

  • Minimum expiry period: a gift voucher must have an expiry date that is at least 5-years from the date the contract was entered into or, alternatively, no expiry date. Any gift voucher contract that states otherwise will be overridden.
  • Ban on requiring full value of gift voucher to be used in one transaction: a gift voucher contract cannot contain a term which requires the full value of the gift voucher to be used in a single transaction.
  • Remaining balances: where a consumer spends only part of a gift voucher and a balance of at least €1 remains on the voucher, a trader must reimburse the consumer the remaining balance of the gift voucher in cash, by electronic transfer or by way of a gift voucher. Where a consumer is reimbursed with a gift voucher, it must have an expiry date that is not earlier than the original gift voucher and a value equal to the remaining balance on the original gift voucher. Any provision in a gift voucher contract to the contrary shall be overridden.
  • Multiple vouchers in a single transaction: a gift voucher contract cannot contain a term that places a limit on the number of gift vouchers a person can use in a single transaction.
  • Transfer of gift vouchers: where a party (e.g. a buyer) of a gift voucher contract gives, sells or otherwise transfers a gift voucher to a third person (e.g. a recipient), the third person will be entitled to exercise all rights under the gift voucher contract on the same terms as the original party.

What Happens if the Act is Breached?

Where a trader includes any terms in a gift voucher contract contrary to the Act they will be overridden. It is a criminal offence for a trader to breach the Act and they may be convicted of a summary or indictable offence and liable to criminal fines and penalties. 

Next Steps for Traders

The Department of Business, Enterprise and Innovation recently reported that an estimated yearly sum of €600m is generated by traders on gift voucher sales in Ireland. With such a large amount of money being spent on annually, traders must now incorporate these new rules and enhanced protections into their gift voucher terms and conditions or face serious consequences. 


Contributed by: Rachel Hayes & Ben Kennedy



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