Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

I am pleased to bring the Consumer Protection (Gift Voucher) Bill 2018 to the House. The Bill proposes to amend the Consumer Protection Act 2007 to provide additional protections for consumers who receive gift vouchers. There are few people either inside or outside the House who have not given or received a gift voucher at some time. Industry estimates suggest that the annual value of gift voucher sales in Ireland is approximately €600 million. A survey undertaken for the Competition and Consumer Protection Commission in 2014 found that 41% of the consumers surveyed had purchased a gift voucher in the previous 12 months. It is clear, therefore, that the appropriate regulation of gift vouchers is an issue which impacts on a large number of people. However, at present, there is no specific legislation dealing with gift vouchers.

This Bill proposes that gift vouchers must have an expiry date of not less than five years from the date on which the voucher was issued. A trader who supplies a gift voucher must also provide information on its expiry date on a dural medium such as paper or email. At present, expiry dates for gift vouchers can often range from as little as six months up to 24 months. In the retail sector expiry dates for vouchers issued by large retailers are typically two years from either the date of purchase or of last use. In the hospitality and travel sectors an expiry date of one year is common. Research undertaken in 2013 and 2014 by the then National Consumer Agency found that between one quarter and half of consumers had let a gift voucher expire at some point without using it. In some cases this happened because the voucher was lost or forgotten but in other cases consumers found themselves unable to use a gift voucher because it had expired before the consumer went to redeem it. It is entirely wrong that consumers should find themselves unable to use a gift voucher because of an unreasonably restrictive expiry date imposed by the business that issued the voucher.

The five year minimum term for gift vouchers provided for in the Bill strikes a fair balance between the right of consumers to get what they or people close to them have paid for and the need of businesses for commercial certainty. In its response to the Department's public consultation of July 2018 on gift vouchers, Retail Ireland, which represents retailers with more than 3,000 outlets throughout Ireland, stated it was not opposed to the proposed five year term for gift vouchers. Chambers Ireland, which represents 43 affiliated chambers throughout the Republic, indicated that five years was a reasonable minimum term for gift vouchers. These views reflect the fact that responsible businesses want to treat customers fairly and to retain their goodwill. Some businesses, although not all, will honour gift vouchers that are tendered well after the expiry date. I am sure many Senators are aware of cases where local businesses have done so. That shows a commendable loyalty to the customer. This Bill is about giving certainty to people that their voucher, at a minimum, will be valid for five years. It is worth noting that in the United States gift vouchers must be valid for at least five years under federal law.

I am pleased that the Bill also includes provisions that address certain unfair practices which were brought to my attention in consumer responses to the Department's public consultation on gift vouchers. The first of these provisions deals with gift vouchers that require the full value of the voucher to be redeemed in a single transaction. While this is not a widespread practice, I am aware of a number of cases where traders impose such a requirement. There is no justification for such an unfair and anti-consumer practice. The Bill prohibits it and provides that where a consumer redeems only part of the value of a voucher and the remaining balance is greater than €1, the trader must reimburse the remaining balance by way of cash or another gift voucher. For example, if one has a restaurant voucher for €100 and the cost of the meal comes to €75, the restaurant must give the remaining balance of €25. It cannot make the person use the full voucher in one single transaction or risk losing the balance.

The second provision seeks to address cases where the purchaser of a voucher is required to indicate the name of the intended recipient. If the name of the recipient on the voucher differs from the recipient's name as stated on the person's passport, for example, the recipient might be precluded from using the voucher. For example, I recently received a representation from a retired person on a fixed income who had been unable to use a voucher worth €200 to book flights to visit family and friends in the UK because the family members who purchased the voucher used the familiar name by which they knew the person rather than the name on the person's passport. Appeals to the airline to re-issue the voucher in the name stated on the passport have been unsuccessful. This type of restriction on the use of a voucher is manifestly unfair and I am glad to have the opportunity to tackle it. Accordingly, the Bill provides that where a gift voucher is subject to a requirement that it be used by a named consumer, a trader shall not refuse to accept a gift voucher from a consumer other than the consumer named on the voucher or charge a fee for amending or changing the name of the consumer named on the voucher. The inclusion of these provisions in the Bill show the value of public consultation. If Senators are aware of other unfair practices involving gift vouchers, I would be glad to have details of them and I am willing, where necessary, to introduce amendments to the Bill to address such practices.

Thus far I have discussed what is in the Bill. I now turn to a provision that is not in the Bill. The scheme of the Bill which I received Government approval to draft in June 2018 included a provision authorising the Minister for Business, Enterprise and Innovation to make regulations relating to fees for the issue and replacement of gift cards and for inactive balances on gift cards. The latter fees, which range from €1.40 to €3.50 per month, are commonly known as dormancy or maintenance fees and apply after 12 months to electronic money gift vouchers such as the One4All and FromMe2You gift cards and to some shopping centre gift cards. Consumers understandably feel that they should be able to redeem gift cards at their full face value. While some of these providers may argue that their gift cards are not subject to expiry dates, the fact is that if one has a gift card for a relatively small amount and approximately €1.50 is being deducted from it every month after 12 months, it will not be long before the value of the gift card is wiped out. In essence, this is an expiry date by another route.

The providers of regulated electronic money gift cards maintain that the cost of providing the additional protections required by law for these products necessitates the imposition of fees.While I remain strongly in favour of the regulation of the gift voucher fees in question, a legal issue emerged in the course of drafting the Bill regarding the power proposed for the Minister of the day to make regulations fixing these fees. That issue relates to possible encroachment on the regulatory regime for electronic money products. As I did not wish to delay the Bill further, I decided to omit the provision on the regulation of gift voucher fees pending the outcome of the required legal review. If the review concludes that the provision to give the Minister power to set certain gift voucher fees would not involve an impermissible or inappropriate double regulation of electronic-money gift vouchers or gift cards, I will propose an amendment on Committee or Report Stage. This would offer further protection to consumers and I would be happy to hear Senators' views on the matter. The fee-setting power proposed for the Minister would be subject to certain conditions, including requirements for prior consultations, fees to be proportionate and commensurate with the costs incurred by businesses in supplying and servicing gift vouchers and consumers to be protected.

I will now deal with the various sections and set out what each seeks to achieve. Section 1 refers to the Consumer Protection Act 2007 because the Bill's provisions will form a new Part 4A of that Act. The incorporation of the Bill's provisions in the 2007 Act means that the comprehensive enforcement regime in Part 5 of the latter will apply to breaches of these provisions.

Section 2 provides for the insertion in the 2007 Act of Part 4A, comprising new sections, 66A and 66B. Section 66A defines gift vouchers and provides for a number of exclusions from the definition. The exclusions relate to vouchers usable only for the purchase at a discounted price of specified goods or services from a specified trader or traders on a specified date or for a specified period of limited duration; vouchers supplied under a customer loyalty or promotional scheme; and vouchers supplied to a customer as a refund for goods returned to a trader. It may be necessary to provide for further exclusions by way of amendment to clarify the products, such as transport or telephone cards, that would not generally be regarded as gift vouchers and that do not come within the scope of the definition.

Section 66B provides for the five-year expiry date for gift vouchers outlined earlier and for the requirement for a trader to inform a consumer of the expiry date, if any, to which the voucher is subject. The section also contains provisions addressing unfair practices that require gift vouchers to be redeemed and fall in a single transaction and that preclude the use of vouchers because of issues relating to the name of the recipient or which impose a fee to change or amend the name of the recipient of the voucher. Furthermore, the section includes offences, provisions and definitions of expiry dates and durable mediums.

Section 3 provides for consequential amendments to the Consumer Protection Act. Section 4 contains provisions on the Short Title, commencement and citation of the Bill.

Gift vouchers are issued by many businesses and purchased by and for many consumers. They are popular because of the advantages they offer to both businesses and consumers. It is essential, however, that the advantages they offer consumers are not undermined by unfair terms and practices. The Bill seeks to address a number of such unfair terms and practices in a fair and balanced way. There is cross-party support in respect of this matter, as is evidenced by Private Members' Bills that have been brought forward. Ultimately, we are all consumers and, therefore, the issue affects us all.

I look forward to working with the House on Committee and Report Stages, including on any amendments that may be proposed. I will be happy to reply to any questions that arise. In the meantime, I commend the Bill to the House.