Brendan Ryan (Labour)

I welcome the Minister of State to consider the Bill. I am pleased to bring the Consumer Protection (Gift Vouchers) Bill 2009 before the House on behalf of the Labour Party. The Bill extends the definition of prohibitive commercial practices in section 55 of the Consumer Protection Act 2007. The Bill adds a new paragraph to the list of prohibited commercial practices. Under the Bill it will be a prohibited commercial practice to sell or offer for sale a gift voucher with a redemption period of less than five years. The net effect will be that all vouchers will remain valid for five years following the passing of the Bill, should it be passed. It shall be an offence under section 56 of the 2007 Act to contravene this provision. Consumers will have a right of action for damages for breach of the provision under section 74 of the 2007 Act. It is a short and simple Bill, which we have deliberately decided not to over-complicate by trying to resolve all potential difficulties with gift vouchers and rather deal with one specific matter only.

I shall outline the provisions of the Bill. Section 1 amends section 55(1) of the Consumer Protection Act 2007 to prohibit the issue of a gift voucher with a period of validity of less than five years. Section 2 is a standard provision. Regarding financial and regulatory implications, the Bill has no implications for public expenditure, but the protections for consumers will enhance confidence and will have positive economic implications.

With Christmas approaching people are considering gift possibilities. Rather than choosing a gift, many people decide to purchase a gift voucher to present to a family member, colleague or friend. As we all know the commercial world has convinced many people that gifts should be presented on many other occasions throughout the year. Gift vouchers are great; I have given and received many in my lifetime. We are introducing the Bill because in practice many consumers have problems with them. One common problem with gift vouchers is that they may have an expiry date that may have passed by the time there is an attempt to redeem them. In many cases the expiry date can be as short as three to six months. Many retail outlets make gift vouchers available which have no expiry date so there is not a problem with all gift vouchers. However, just because a gift voucher does not have an expiry date printed on it, does not mean there is no expiry date. It is not a guarantee of an open-ended expiry date policy.

The National Consumer Agency's website, www.consumerconnect.ie provides a comprehensive list of outlets together with their gift voucher expiry date policies. While many good policies have no expiry dates, it is usually the ones with the short shelf-life that cause the problems. There is no reason for having an expiry date on gift vouchers. There is nothing perishable about them. They are usually made of paper or cardboard. Most importantly, the money has been exchanged for the value of the voucher not for the voucher itself.

Some dedicated gift voucher companies, who, perhaps, may build in some percentage of non-redeemed vouchers into their business model, may feel that the transition to a five-year expiry date would present them with some initial cash-flow issues. However, many jurisdictions have moved to outlaw such practices, which is what we are attempting to do today with this Bill. The US has moved at federal level to prohibit gift cards or vouchers expiring before five years from the date of purchase. In Canada, different states have different policies. However, in 1997 Ontario and Manitoba moved to prohibit expiry dates on gift cards and other states are also moving now.

Although our proposal is for an expiry date of no less than five years, we would be open to argument on committee stage that there may be a case for something shorter. There has been much discussion on the matter of gift vouchers in recent years. We feel it is now time to address one of those issues. We are consciously not trying to address other possible difficulties with gift vouchers in the Bill at this stage. Some of these are: partially used vouchers and varying policies on getting change; change of shop ownership; and possible closing down of the business before an attempt to redeem the voucher is made.

Since the publication of the Bill, the case has been made to me that a distinction might be made between vouchers with a stated monetary value and those based upon an agreed provision of service. In the latter circumstance, the cost of delivering the service may have escalated over the five-year period and thus it may be unfair to expect the provider to provide the specified service at the rate that was paid. However, this can be considered on Committee Stage. There may be merit in a two-tier system.

I look forward to hearing the contributions of other Senators, and I hope the Minister of State will give the Bill his support at this Stage and introduce any amendments he may feel are necessary on Committee Stage.