Phil Prendergast (Labour)

I thank the Minister of State for his contribution. I wish to make some points in support of my colleague, Senator Brendan Ryan. Making vouchers redeemable for five years benefits the issuer and consumer. Having in place specific legislation is also likely to benefit both parties. As my colleague Senator Ryan stated, and this was also mentioned by the Minister of State in his contribution, issuers operate differing and often inexplicit terms. Customers are often confused or misunderstand the terms under which the voucher is issued. A common problem is that people do not understand that vouchers have a limited life or that the product or service in respect of which they apply is only available for a limited time. While I am aware of this, it must surely create uncertainty in the customer's mind. I believe it is safe to assume that potential sales are lost because of this. Clear rules in regard to the obligations on the issuer and the rights of the consumer are likely to increase sales by improving customer confidence. In this regard, this legislation would be useful.

Not alone would the Bill improve consumer confidence, it would encourage retailers and service providers to develop creative and imaginative ways to attract business through a range of voucher options. There is no reason the range of goods and services that can be purchased with vouchers could not be expanded. For instance, the Post Office offers a voucher which applies to numerous retailers and services. There is scope for expanding this principle so that vouchers for complimentary products can be issued, for example, where parents pay for a honeymoon as a wedding present or a person buys a voucher for car hire, visitor attractions and so on. This is quite common in the US but not so common here yet. This suggests that creative thinking on the part of businesses is required. God knows we need a little innovation in this regard.

A lead on this is being taken at a local level with chambers of commerce in many towns operating a system during the Christmas period which allows people to buy gift vouchers which can be used in participating shops. I see no reason a countrywide scheme along these lines cannot be developed to operate all year round. This would help small downtown businesses attract trade from the multinationals in the out-of-town shopping centres and retail parks. All our towns are now suffering a lack of investment due to the location of larger shopping centres on the edge of towns which offer free parking and other associated benefits. Clonmel is an example in this regard. I am aware we have bucked the national trend by being the only town this year to open not one but two shopping centres. The Showgrounds shopping centre, with Marks & Spencer as the anchor tenant, was opened in the latter part of this year by the Taoiseach. We are delighted Clonmel is now a wonderful shopping town.

There is an increasing need for Irish retailers to protect themselves from the threat posed by Internet shopping. Members will be aware that yesterday was the busiest day of the year for Internet shopping in terms of the timeline for deliveries to consumers before Christmas. Everybody was warned that yesterday was D-day in that regard. It seems inevitable that just as the price of goods has decreased during the past 20 years because they are sourced from low-wage economies, these economies will develop their Internet retail capability in the coming years. We will need to monitor this. Those in recorded music and book sales know all about this threat and all the evidence suggests this will expand into other areas of the retail sector, putting added pressure on retailers here to add value to their offering. One of the ways of doing this is through legislation which gives consumers confidence that vouchers bought in Ireland will be redeemed and that they have the weight of the law on their side.

There are further ways in which issuers would benefit through vouchers being redeemable over a longer period. Vouchers redeemed some years after purchase are very much in the interest of the retailer who receives cash. Vouchers also act as a form of credit provided by the consumer to the issuer. They are, in effect, interest-free loans to the retailers because the cash is received before the product or service is provided. In the event that someone waits some years to redeem their voucher, the issuer, owing to inflation, which is expected to return sometime next year, could get an added margin. For instance, a voucher bought for €100 tomorrow and redeemed in three years' time will purchase less owing to inflation. That is not a universal benefit because in some cases the voucher is for a specific product or more often a service. Where the voucher has a cash value, which is the most common, the issuer could be quids in. A five-year time limit on the redemption of vouchers is not something that retailers and service providers should fear. As Senator Ryan has shown, longer redemption terms are feasible and have been introduced successfully in other countries. I thank the Minister of State for listening to my contribution.