Justice and Consumer Affairs

Guidelines respecting expiry dates, fees on gift cards now in effect (08/12/22)

NB 1866

Dec. 22, 2008

FREDERICTON (CNB) - Consumers are reminded that gift cards and gift certificates are subject to new guidelines under the Gift Cards Act. Justice and Consumer Affairs Minister T.J. Burke issued the reminder today.

The act, which came into force in June, provides consumer protection with respect to the terms and conditions of use of gift cards and gift certificates bought and used in New Brunswick. The act also sets rules on expiry dates and fees.

"There are no expiry dates on gift cards and gift certificates used in New Brunswick," said Burke. "They are valid until fully redeemed or replaced. But consumers should be aware that there are certain exceptions."

The following types of gift cards are permitted to carry an expiry date:

Cards issued by a credit card company, bank or telephone company fall under federal jurisdiction and are therefore exempt from the act.

Consumers should also be aware that fees on gift cards are permitted for the purposes of customization or replacing a lost or stolen card. A dormancy fee may be charged after a set period on multi-store cards - cards valid for use at multiple, unaffiliated stores such as those sold by a retail shopping mall.

Retailers cannot issue or sell a gift card for less than the value of the payment made by the purchaser of the gift card.

The Gift Cards Act also requires that information on terms and conditions of use of a gift card or certificate be clearly stated in a way that commands the consumer's attention.

"I am proud of the changes we have made to ensure consumer protection in relation to gift cards and gift certificates," said Burke. "I encourage New Brunswickers to be aware and be informed as they make their shopping decisions this holiday season."

08/12/22

EDITOR'S NOTE: A list of frequently asked questions about the use of gift cards and gift certificates in New Brunswick follows. MEDIA CONTACT: Elaine Bell, communications, Department of Justice and Consumer Affairs, 506-453-6543.

Frequently asked questions: Gift cards and gift certificates

Why is the government regulating gift cards?

The purpose of the Gift Cards Act is to ensure that consumers get what they paid for; that is, the value of a gift card is not reduced or eliminated due to service fees or through expiry dates. Expiry dates have been prohibited with some exceptions, and fees are restricted under the act.

Will the legislation apply to gift cards issued before the act came into effect?

No. The regulations apply only to gift cards bought on or after June 18, 2008. Consumers are advised to keep their receipts as proof of date of purchase.

Does the act apply to prepaid phone cards?

No. The act does not apply to prepaid phone cards because they fall within the jurisdiction of the federal government. Prepaid purchase cards issued by a financial institution with credit card logos or branding also fall under federal jurisdiction.

May a gift card have an expiry date?

Expiry dates are prohibited, except in the following circumstances:

What happens if a gift card has an expiry date on it?

Some stores may choose to use up remaining cards that have expiry dates on them. If there is an expiry date on a gift card that is in violation of the act, the card remains in effect as if there were no expiry date.

What fees are allowed under the new legislation?

Fees are not permitted under the new law except in the following circumstances:

When may dormancy fees be charged?

The regulation allows for a monthly fee of up to $2.50 if the card has been inactive for 15 months. Consumers may, in the 15th month, request a three-month extension, giving them up to 18 months to use the card without penalty.

What happens if an illegal fee is charged?

If a fee is charged in contravention of the act, the consumer has the right to demand a refund by giving written notice to the issuer within one year of the date the fee was paid. The issuer is required to provide the refund within 15 days of receiving the notice.

What information must be disclosed on a gift card and in what format?

All restrictions, limitations and conditions with respect to the use, redemption or replacement of the gift card, including any permitted fee or expiry date, must be provided in writing, in a manner that is likely to bring it to the attention of the cardholder.

Are the disclosure requirements different for multi-store cards?

Yes. In addition to the disclosure requirements listed above, the issuer of a multi-store card must also include:

08/12/22