Ivana Bacik (Independent)

I welcome the Minister of State. I hope he will accept the Bill as I am aware he has expressed sympathy for the principle of it. As Senator Boyle said, there has been some criticism of the timing. The timing of the introduction of the Bill is perhaps unfortunate in that it clashes with the budget, but it is appropriate that it be debated in December. It is the busiest month for gift voucher purchases and research shows that the week before Christmas is the time when most gift vouchers are purchased. The week after Christmas and the month of January is the time when gift vouchers have the highest redemption rate.

We are also aware that a large number of gift vouchers are not redeemed by consumers, thereby giving a major gift to retailers but an unfair one. There is a serious lack of consumer protection in this area. I was in the Dáil Chamber earlier to hear the Minister for Finance deliver his Budget Statement. The Minister's critical aim in the budget, with which we all agree although many of us are critical of the way he is pursuing it, is to boost consumer confidence, ensure an increase in consumer spending and thereby try to bring about an economic recovery.

All Members have heard from representatives of the restaurant industry, which is beleaguered, and the retail sector, which is also under pressure, especially in the Border counties where it is suffering as a result of cheaper prices in the North. There is huge pressure on retailers and restaurants, but these are two of the main sectors in which gift vouchers are purchased. One small but important way to boost consumer confidence and spending is to create a sense of goodwill, in the season of goodwill, about gift voucher purchases. Many people are put off buying gift vouchers because of the difficulty with redemption. The expiry date is often as short as six months. I have seen many vouchers which must be redeemed within six months, which can be difficult for people. In addition, traders often do not make it easy for consumers to redeem gift vouchers. I will describe later my recent experience with a gift voucher which will show how difficult it can be to redeem them and the importance of this Bill.

The Minister of State said a number of times that he is sympathetic to the principle of the Bill. He acknowledged that there is a serious issue of consumer protection and unfairness to consumers. However, he was critical of the implementation mechanism in the Bill which he said is inappropriate under the European directive. If he thinks it is not the right mechanism, that is fine. If he could indicate that he will bring forward similar legislation, it would be a step in the right direction and would demonstrate that he is taking the issue seriously enough to deal with it in similar terms in other legislation. That would be an important concession but I did not hear him make it.

The Minister of State accepted there is a problem and pointed out that the periods for redeeming vouchers differ from trader to trader. That is the issue we are trying to address in the Bill. The period for redeeming vouchers can be as short as six months. Some traders, although the number is limited in Ireland, have no expiry period for the gift voucher, but that is very much the exception. It occurs in other jurisdictions. In this country, the trader can set any expiry period they wish. I received a gift voucher for a hotel in Ireland which I will not name. It became almost impossible to redeem it within the 12-month period. The hotel insisted that it would have to be spent over two nights of a weekend rather than one night, as suited us. That example shows the difficulty for consumers in trying to redeem gift vouchers. Where there is a tight expiry period the trader can make redemption almost impossible.

One might argue that it is not in traders' interests to make it so difficult for people to redeem vouchers because it does not inspire confidence among consumers in the service offered by the trader. Frankly, many traders might lose all interest in redeeming vouchers because the money has already been paid up front. Once the voucher has been purchased, the trader has made his money and, in a sense, it is against his or her interests to redeem it. That gets to the core of this problem. Other than a general idea of creating goodwill and ensuring trust among consumers in their service, there is no particular commercial interest for a trader in redeeming a voucher. If, for example, a hotel or restaurant has sold a voucher, it has made its money and it will simply cost it to honour or redeem the voucher. That is the reason one finds, in practice, hotels imposing specific rules on the holders of gift vouchers which make it difficult for them to redeem the vouchers and the reason the issue of gift vouchers is so unbalanced without regulation.

I note the Minister of State's reference to the National Consumer Agency guidelines. The agency helpfully provides guidelines on its website for consumers who have purchased gift vouchers or have been given them. They suggest that consumers use a voucher as soon as possible, look for one that has a clear expiry policy and so forth. It is striking, however, that the onus is placed on the consumer. It is a little like, in the criminal law context, the advice given to people to avoid becoming victims of muggings. I recall a memorable advertising campaign in London some years ago. Prominent advertisements were displayed which showed a person using a mobile telephone on a street with a shadowy character looming behind them to grab the mobile telephone. The message of the advertisement was not to use one's mobile telephone in public. It was laughable. All of us use our mobile telephones in public all the time and we have a right to expect to be able to do that without being mugged. To imply that the person using the mobile telephone is in some way responsible if they are mugged for doing so sent out all the wrong signals. In fact, I have used that advertisement in criminology class as an example of a victim-blaming strategy that sometimes occurs in crime.

It is obviously a different context but the National Consumer Agency guidelines appear to blame the consumer for the failure to redeem the vouchers, telling them that it is up to them to check the expiry date and use the voucher as soon as possible. Of course, consumers, myself included, lose vouchers and they are not redeemed, but many more are not redeemed because the expiry period has elapsed - the consumer might not even be aware that there was a specific expiry period - or the trader has attached difficult conditions to honouring the voucher.

It might appear to be a small point but this market has enormous value. I have looked at some of the data available. In 2006, for example, the gift voucher or gift card market in the US was worth $80 billion. It is estimated to be worth approximately £3 billion in the UK in 2009. I have tried to find studies on redemption rates. The estimates that are most easily available on the Internet show that 10% of vouchers are not redeemed. I have heard of other studies relating to book tokens which show a higher rate of non-redemption. However, even if the rate is 10% and 90% of vouchers in the US were redeemed in 2006, there was still an enormous gain for retailers of approximately $8 billion. Retailers unfairly, as it were, made $8 billion on the back of consumers because they sold vouchers that were never redeemed. Some of the non-redemption was clearly the fault of the consumer, but some of it could have been due to the difficulties imposed upon the consumer by a lack of a clear expiry period, a short expiry period or other conditions.

I was particularly interested in the American situation where no uniform standards are imposed on vouchers. Fees or other conditions can be imposed for redemption. Some firms have moved to advertise no fee no expiry policies to try to encourage consumers to purchase gift vouchers. This seems to be a novel approach but it relies upon the goodwill of individual traders. Key to this issue is the lack of any commercial benefit to a trader in encouraging people to redeem their gift vouchers. Indeed, it is the other way around since the trader will have made money without providing the service, books, meals or hotel nights. Clearly, there is an imbalance. There is a lack of protection for the consumer who bears all of the onus of ensuring the voucher is redeemed. There is no real obligation on the trader and no uniform standard has been set in Ireland or the US in terms of expiry periods and conditions for redemption.

Some provinces in Canada have passed legislation to regulate gift vouchers and, for example, ban expiry dates and the practice of imposing fees. We should follow this model. The Labour Party Bill presented to the Minister of State provides an excellent example of a relatively straightforward way of doing this, namely, it would not be possible for a trader to sell or offer for sale a voucher redeemable that is valid for a period less than five years. This clear rule and restriction on traders could be imposed and would go some way towards redressing the imbalance felt by consumers.

There is some interesting literature on the philosophy of gift vouchers and whether it is better to receive a bad present, but one that is individually chosen, or a gift token. I do not like receiving gift tokens because it shows a certain lack of thoughtfulness. When one receives a token, it is of greater benefit if one sees that there is an expiry period of longer than 12 months. In practice, it is difficult to remember in every case to spend or redeem a gift voucher within a short period. When expiry periods in many cases are as short as six or 12 months, something is wrong. We must address the imbalance through legislation and I urge the Minister of State to accept the Bill.