New gift voucher regulations to come into effect

New laws which will impose consumer-friendly rules on a largely unregulated gift voucher industry worth hundreds of millions of euro annually come into force on Monday.

The Consumer Protection (Gift Vouchers) Act will impose a minimum expiry date of five years for vouchers and ban contract terms which require them to be spent in a single transaction.

The new law will also ban contract terms that limit the number of vouchers that can be used in a transaction and prohibit the cancellation of gift vouchers or the imposition of charges by airlines if the name of a gift voucher recipient differs from the name on a passport.

In passing the laws Ireland has become the first European country to enact legislation protecting consumers in this area.

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"I am very pleased to be able to bring the five-year expiry date and a number of other important protections for consumers into effect [and] I am particularly pleased to do so at the start of the Christmas period when many of us will buy or receive gift vouchers," the Minister for Business, Enterprise and Innovation Heather Humphreys said.

She pointed out that many gift vouchers until now have had expiry periods of just one or two years and in some cases it has been as little as six months.

“As of Monday anyone who receives a gift voucher will have the certainty that it will be valid for at least five years,” she said.

The Bill also includes provisions that ban a number of unfair terms in gift voucher contracts.

The first of these provisions outlaws any term in a gift voucher contract that requires the full value of a voucher to be spent in one transaction.

Where a gift voucher cannot be used more than once and the consumer does not redeem the full amount of the voucher in an initial purchase, the business will be required to reimburse any remaining balance of more than one euro by way of cash, electronic transfer or voucher.

A second provision bans contract terms that prevent consumers from using more than one gift voucher in a transaction.

Another clause was introduced to stop airlines cancelling gift vouchers where the name on vouchers was not identical to the person’s name on their passport or charging recipients to change the name on the voucher.

"The businesses that used these kind of contract terms to deprive consumers of the full benefit of gift vouchers should not have been doing so, and from Monday they will no longer be able to make unfair gains at the expense of Irish consumers," Ms Humphries said.

“It is estimated that every year consumers in Ireland lose millions in unredeemed or expired vouchers. These measures, which come into effect from Monday, will protect consumers and will help to ensure the value of the voucher you buy for your loved one this Christmas ends up in their pocket and not somebody else’s.”