Seanad debates

Wednesday, 23 January 2019

Consumer Protection (Gift Vouchers) Bill 2018: Second Stage

 

10:30 am

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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I welcome the Minister for Business, Enterprise and Innovation, Deputy Humphreys, back to the House. She is a regular visitor and is always very welcome.

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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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.

Photo of Aidan DavittAidan Davitt (Fianna Fail)
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We are delighted to have the Minister back in the House. As she is aware, Fianna Fáil welcomes the Bill. We have discussed it with her on a number of occasions. We broadly welcome the provisions in the Bill, which are similar those of the gift card and gift voucher Bill for which my colleague, Deputy Niall Collins, sought cross-party support in mid-2017.

The gift voucher market in Ireland is sizeable, worth in excess of €600 million in sales. A large proportion of the market is subject to direct consumer protection regulation. In its draft Bill, Fianna Fáil rightly distinguished between, on the one hand, the large, unregulated element of the market that typically includes store-branded gift vouchers and shopping vouchers and, on the other, the smaller, highly regulated e-money sector. The latter sector is regulated under various EU directives including electronic money directives, anti-money laundering directives and unfair contract term directives. These directives provide strong consumer protection provisions, including obligations regarding transparency, non-application of expiry dates on products, protection of client funds in safeguarding accounts to protect voucher holders in the event of an issuer going out of business, and provisions for application of fees.

Through its own research into the gift voucher market in Ireland, and based on outputs by the Department of Business, Enterprise and Innovation, following its consultation process on the subject, Fianna Fáil acknowledges the substantially different business models that apply to the regulated gift voucher sector and its unregulated equivalent. The regulated sector incurs vast increased costs of operation due to the regulatory mandates that apply and, consequentially, has a justifiable set of income streams, including fees, to meet these high costs. Fianna Fáil also observes that the gift voucher market is highly competitive, with a wide range of consumer choice on offer.

The Bill adopts features of the European electronic money directive and other directives and applies them to the full gift voucher market in Ireland. These features include a control on the application of expiry dates and the introduction of obligatory transparency, among other features. While these provisions do not go as far as the protection offered by products, such as One4All, which are regulated under EU directives, they are welcome improvements in consumer protection for currently unregulated products. We urge the Government to be cautious on the application of the Bill to the current regulated gift voucher sector on the basis that it introduces some risk of regulatory misalignment and conflict with superior EU law. However, as the Minister acknowledged, we are happy to support the Bill. She indicated that she is seeking advice on that matter and we will see what transpires in that regard.

The legislation, without amendment, will ensure that consumers can select gift voucher products of their choice with full access to the terms and conditions and be sure there is a reasonable period under which the products will not expire, resulting in a loss of funds. As stated, we do not support any amendment which seeks to impose unnecessary controls on pricing in the sector. This is not required because the market is highly fragmented with wide consumer choice and, with increased protections of transparency, consumers can select their product of choice safely in the knowledge of the terms and conditions. Imposition of price controls would introduce less choice for the consumer and would affect the industry’s ability to innovate and grow, to the detriment of the consumer.

As noted, Deputy Niall Collins has done much work on the issue and we are happy with the bulk and drive of the Bill. We are not keen to seek many amendments, although I note that the Minister is awaiting legal advice on one aspect, as she mentioned, and I urge caution in that regard.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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I call the doctor, Senator James Reilly.

Photo of James ReillyJames Reilly (Fine Gael)
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I thank the Acting Chairman for affording me my full title. I welcome the Minister back to the House.She has a strong record of bringing Bills to this House that are practical, of public interest and to the benefit of the consumer.

One of the main parts of this Bill is that none of these vouchers should expire in less than five years and I strongly agree with that. I continually come across vouchers that are not much use to me anymore. People buy them with the intent that the person for whom they are bought will benefit from them. It is not good enough that certain retailers have used methodologies to deprive people of what they have paid for either for themselves or someone with whom they have close links.

As the Minister mentioned, many retailers honour vouchers long after their expiry date. I recall listening to a man from Dundalk espousing that very point on the radio. Somebody walked into his shop after 28 years and he honoured the voucher. Inflation must have taken its toll but, even so, it was a great thing to be able to say and one could only commend him on that approach.

The provisions in this Bill are important and the one around full redemption of the voucher at the time is an important consideration. Consumers should be able to retain what remains on the voucher. It is utter nonsense that a voucher is invalid if there is a different name on it from the person who presents it. That is clearly spurious and unfair.

This is a good Bill. The Labour Party made an attempt at this legislation back in 2009 but it was rejected by the Government of the day. As the Minister said, in 2015 the then Minister, Deputy Bruton, put forward a Bill like this that did not become law.

I hear precisely what the Minister said about her concerns around electric money orders and I agree we do not want to find ourselves falling foul of European law. I am pleased she will come back with an amendment to address that particular situation following a review.

I want to mention One4all, a company set up in Swords in 2001 which employs 140 people. It provides a fantastic service and also brings in a lot of money from abroad as it is a huge provider of gift cards in the UK and Maltese markets.

Employers should note that Revenue takes a benign view on vouchers. An employer can give a voucher up to the value of €500 without it incurring a tax liability on the employee and it allows the employer company to claim it against tax. Employers should remind themselves of that if they want to make Christmas time a bit better for their employees, or if the business is going well and they want to reward their workers.

It is important we remind people of the vouchers. The Minister told us that €600 million is spent on vouchers in this country each year. How many people have vouchers stuck in drawers and odd places at home and have forgotten about them? Everyone should make it their new year's resolution to hunt out old vouchers in their houses and spend them because that is the way the shopkeepers will get their money and the consumer will benefit from the gift that has been bestowed upon them.

There is an issue I want clarity on, and I have spoken to the Minister's officials, but I think it would be useful to put this on the record of the House. In many instances, as the Minister pointed out, the vouchers are never spent, for whatever reason, whether they are lost, misplaced or out of date. I would like to know what happens to the money. I am not talking about electric money transfers, which we know stay in perpetuity and the consumer has a right, whether in three, five or 20 years, to come back for. I am talking about the gift vouchers that we are addressing in this particular legislation. If the voucher is never redeemed, what happens to that money? I have been told it goes into an account that neither the shopkeeper nor the retailer can access. I would like to know if that is true and, if that is the case, whether it becomes part of the dormant accounts system and ultimately find its way back into public circulation. I do not believe that is true. What has happened to the money I paid for that voucher for my friend ten years ago? Did the shopkeeper from where the token benefit from it? Did the gift card seller who did the deal with the shopkeeper for those tokens get the money? What happened to the money? I would appreciate if the Minister can provide clarity on that because I have heard various things and, obviously, it is something in which I have an interest.

To reiterate, this is a good, simple and straightforward Bill. It will hugely improve consumers' rights and we cannot let the opportunity pass without reminding everybody at home that if they have vouchers to dig them out and spend them. I commend the Bill to the House.

Photo of Pádraig MacLochlainnPádraig MacLochlainn (Sinn Fein)
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I welcome the Minister to the House to discuss this legislation. I note there have been some delays and difficulties in getting the Bill to this point and there have been many attempts to legislate on this issue before.

It is important to listen to and understand the perspectives of businesses in regard to legislation that affects them. It is also important to properly resource businesses to equip them to deal with any major legislative change. Equally, it is also important to balance protection of business with protection of the consumer and that is what this Bill aims to do today. It is important the Government stands strong to get this legislation debated, amended, if necessary, and enacted into law. It should not be left to gather dust as the other attempts have been.

As the Minister said, this Bill aims to provide for a five-year expiry period for gift vouchers, prohibit terms in gift voucher contracts which require gift vouchers to be spent in a single transaction, ban terms which impose a fee for changing the name of a recipient on a gift voucher and provide for the publication of guidelines by the Competition and Consumer Protection Commission on gift vouchers.

As I said, there is a balance to be struck in terms of authentically engaging with businesses and listening to and addressing their concerns and protecting consumers. I would appreciate if the Minister could outline how many meetings have been held with gift voucher companies in relation to this Bill. Equally, how many meetings have been held with consumer rights groups ? Can the Minister outline what the outcomes of these meetings were, including any major concerns that either party had?

My party colleague, Deputy Quinlivan, tabled a parliamentary question about complaints that have been lodged with the Competition and Consumer Protection Commission from 2014 to 2018 regarding gift vouchers. This is vital information to get a clear picture of where the key stakeholders are with this issue, how prevalent the issue is, what problems are currently affecting consumers and how our current complaints mechanism is addressing these concerns.

The key concern I have from my primary analysis of this legislation is around what will happen in terms of experience vouchers. It is important we discuss how this legislation will affect gift vouchers that are given as experience vouchers, for example, for a hot air balloon ride, a bungee jump, adventure sports, race car driving, etc. The costs of these activities could change dramatically over the proposed five-year period. For example, if a voucher for a hot air balloon experience is purchased now for €300 and a five-year limit is enforced, and the price of insurance and the gas used, or both, goes up substantially in that timeframe, the profit margin of the company will be eliminated.

As we know, the problem of escalating insurance costs is going unaddressed by this Government and that is of serious concern to most, if not all, businesses operating in the State. It is, therefore, important that this issue is addressed by this Bill. Has this particular issue been considered by the Department?

Another concern I have about the legislation is around dormancy fees. These are fees charged by a company for certain time periods when a voucher is in use.A company can currently deduct an amount of money per year as an administrative charge and when someone goes to use his or her voucher, he or she has less on it than he or she thought. Will dormancy fees be outlawed under this legislation? What about vouchers bought in other jurisdictions with stores here? How will this new law apply to them and will there be a five-year term on these? For example, if one buys a voucher in Spain, in a multinational chain that has stores here, which expiry date will apply?

I would appreciate if the Minister could clarify the points I have raised. Overall this is a good Bill that Sinn Féin can support. The banning of fees for changing a name and the requirement to use a voucher in a single transaction is welcome, and a five-year term seems to strike a fair balance between the rights of consumers and those of businesses. However, the issue of experience vouchers needs to be teased out. The ambiguity of dormancy fees is a concern. We ask the Minister to look at this and, if necessary, we may table an amendment to this effect on Committee Stage. We ask the Minister to work with us on that.

Photo of John O'MahonyJohn O'Mahony (Fine Gael)
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I am glad to support this Bill about the regulation of gift vouchers and commend the Minister for progressing the legislation to this point and hopefully to completion. We are often accused in these Houses of not having common sense rules, regulations and legislation. This is certainly legislation that is badly needed. It has been talked about for some time and I am glad to see that it has reached this stage.

With the increased use of gift vouchers, especially at seasonal occasions such as Christmas or Easter, there must be clarity and protections for all stakeholders, especially the consumer. This Bill brings that protection. I did not realise until the Minister gave the figures that over €600 million annually is spent on gift vouchers. That is a large amount and great dynamic for businesses. It needs to be handled and regulated, though it is not an issue for the majority. Having mislaid vouchers over the years, I have found many businesses very co-operative, understanding and trusting. I saw a case in the media recently where a business honoured a voucher that was 15 or 20 years old. It is not a regulation for the majority but for the few that may have abused the system to a certain extent.

I think that five years is a reasonable time limit. I am glad to see that Chambers Ireland, Retail Ireland and so on fully support this time limit or do not object to it. I heard a discussion on the radio recently about the small number of businesses, one of which is not far from this establishment, where if a voucher was not spent in full, a person lost the rest of his or her gift voucher. That is outrageous and I am glad that this Bill addresses it. Vouchers are good for business and for consumers if everybody abides by the rules. Big businesses and small businesses need as much footfall and as many transactions as can be generated and gift vouchers are increasingly a vehicle to do that and will benefit from the clarity and protection in this Bill. Everyone is a winner here, including consumers and businesses. Hopefully the only ones who might lose a little bit will be some radio shows. Joe Duffy might have to fill in a few missing parts with another topic but that will be a sign that this Bill is successful. I wish the Minister well with it.

Photo of Jerry ButtimerJerry Buttimer (Fine Gael)
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Cuirim fáilte roimh an Aire go dtí an Teach. Ba mhaith liom comhghairdeas a ghabháil léi as ucht an Bhille seo. In welcoming this Bill and the Minister, Deputy Humphreys, I first of all compliment the Minister on her common sense approach to Brexit. I ask some of our parliamentary colleagues across the water to pay attention to some of what the Minister has said about a number of issues relating to Brexit because she has struck a chord with regard to the importance of an all-Ireland approach to Brexit. I commend her for that. We have not had the Minister here for a while because she has been busy but she will be back with other legislation. I welcome the Minister and this Bill.

It is most welcome legislation and as Senator Reilly said, it has two parts. One is ensuring that we all spend and use the voucher and the other is ensuring a common sense approach to the regulation of gift vouchers. I welcome the Minister's dedication to this legislation. When she became Minister, she set about doing this work. I know she has set aside some other issues which is understandable given the complexities of the situation. For some of us, five years may be a bit too little and we may like to see ten years or more. I understand where the Minister is coming from. I know that we cannot do it retrospectively but it is a pity that we could not since in every household in the country, vouchers and gift cards lie idle. I am guilty myself. This legislation ensures that a balance is struck between the needs of business and the consumer.

Before this legislation was introduced, the Minister helped to educate people, including consumers, to be able to redeem the voucher and addressed the need for regulation. I ask that she continues, through the use of advertising by her Department, to promote and educate people about this legislation. It is a winner for the consumer. Many people are not informed. We could go into shops with, for argument's sake, a €50 voucher and be told that we have to spend it all at once. We might go into other shops where one can keep a portion of the card. It is important to regulate vouchers. As the Minister said in her speech, and Senator O'Mahony also referred to it, €600 million is a sizable chunk of change in our retail economy. There is a need for regulation and for clarity and certainty for the consumer.

I digress to talk about the matter of the retail business itself, which is under savage pressure from e-business and online sales. I know we have seen some reduction in some of the retail activity on the high street. The struggle we see in the city of Cork, for example, is linked to a number of issues. I hope that we recognise that face-to-face spending has dropped. There is now an ongoing battle that we must address as a new generation of legislators at parliamentary, city and council level, with those charged with managing our local authorities, and our business partners in large urban towns and cities. We have to look at how we can tackle e-commerce and spending on it, which has increased by almost 10%. The migration to online activity is happening at a rate which is perhaps faster than what was envisaged.

There will come a time when we, as parliamentarians, may be asking what the future for our cities and towns is. I hope that the Government will look at a cross-departmental approach to how we can, with local authorities and business leaders, whether chambers of commerce or business associations, work to challenge each other in making our cities the place to be. I specifically refer to the city of Cork from which I come. We must ensure that the island of Cork city does not become a ghost city. We must have an attractive proposition for people through the building of park and ride facilities and through parking regime ameliorations for customers. I hope that we can, through the Minister or whoever the lead Minister will be, have a multi-departmental approach. I am fearful for our large urban towns. If we do not tackle the issue of online and e-sales, then we will concede the battleground.That is, in part, a matter for retailers themselves. An overarching approach can be taken by the local authorities, Government and business leaders.

I commend the Minister for the Bill. I thank her for being here today. I commend her for the work she is doing to ensure that in her Department the Red Cow and the M50 are not the end of Ireland. She has been very progressive and worked hard to attract businesses and jobs to places outside of Dublin, which she has done quite successfully, especially in the city and county of Cork where I am from. I thank her for that and for her courtesy and that of her officials when we meet them about issues around employment. It is important we ensure the spread of jobs around the country. I am very happy that the Minister understands that and works very hard to ensure it. Today is a good day for the consumers of Ireland. I hope the Minister's views on Brexit are heard across the water in the House of Commons and by those who do not understand the importance of Brexit and what a hard border will mean to us in terms of retail, business, farming and tourism.

I thank the Minister again.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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The Leader was right on the button of six minutes. He has obviously been practising.

Photo of Aidan DavittAidan Davitt (Fianna Fail)
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It was the first shots of the general election.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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He was exactly six minutes.

Photo of Jerry ButtimerJerry Buttimer (Fine Gael)
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I heard the Cathaoirleach telling us on the Order of Business this morning that we should stick to our time limit.

Photo of Aidan DavittAidan Davitt (Fianna Fail)
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Well done to the Seanadóir.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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Senator Buttimer was exactly six minutes.

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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I thank all Senators who spoke on the Bill for their constructive and helpful contributions to the debate. I also welcome the Senators' expression of support for the contents of the Bill. As I mentioned earlier, the Bill deals with an issue of considerable importance for consumer welfare and businesses that provide goods or services to consumers. It is clear that consumers deserve greater protection when they buy gift vouchers.

Following our debate it is clear there is wide support for introducing a longer expiry date on all gift vouchers. Equally, it is important that consumers are protected against unfair and anti-consumer practices such as the requirement to fully use the value of a voucher in one transaction and the restrictions put in place by certain businesses with regard to the name of the gift card recipient.

A number of issues were raised which I will address. With regard to the issue referred to by Senator Davitt on electronic money and payment services regulations, the legal advice received from the Office of the Attorney General concluded the provision for a five-year minimum term for gift vouchers did not give rise to any incompatibility with the electronic money regulations in view of the fact electronic money instruments remain redeemable for as long as funds are held in the instrument. This type of voucher is, effectively, subject to no expiry date. The legal advice stated that the provision in the original scheme of the Bill empowering the Minister for Business, Enterprise and Innovation to make regulations fixing certain gift voucher fees raised issues regarding its relation to the regulatory regime for electronic money instruments. The matters at issue are being reviewed in consultation with the Department of Finance and the Central Bank. The provision on the regulation of fees does not form part of the Bill. The outcome of the legal review will determine whether it is possible to reintroduce such a provision on Committee or Report Stages. At the end of the day, I want to protect consumers. It has been brought to my attention on many occasions that when people receive a gift card, for example one worth €100, they are delighted but sometimes do not use it. They hold on to it to buy a particular item they are waiting for and then discover after 12 months it is worth less than they thought it was. The value reduces every month after that. Some people were not aware of that and it has caused concern.

Senator Reilly raised the issue of who benefits from the funds. He talked about his friend who did not cash a gift voucher. If one does not cash a gift voucher, it goes back to the shop. I encourage people to cash their gift vouchers and to use them as quickly as possible because we have found examples of businesses going out of business and people not being able to cash vouchers. That happens too. If one does not cash it and the expiry date arrives, the business does not have to cash it after a year or 24 months. I am extending that to five years, which I think is a reasonable time to allow people to cash their gift vouchers.

Senator Mac Lochlainn raised the issue of experience vouchers. With so-called experience vouchers, purchasers buy a voucher to participate in a named experience, for example a voucher to take part in a hot air balloon ride. Operators have claimed the introduction of the proposed expiry date provision could see them bear higher costs for the provision of the service in the future than the original cost of a voucher purchased five years earlier. They said it could result in excess demand over potential supply of the experience if many voucher-holders held onto their vouchers for almost the entire five-year period, as the cost will have gone up. While noting the concerns expressed, I do not believe the scenario outlined will emerge in the vast majority of cases and thus I do not believe that an exception is required for these situations. I believe the retailer can get over that issue by putting the value of the experience on the voucher. That should cover it.

The Senator mentioned buying a voucher in Spain. I cannot answer that question because I do not know if it can be spent in this country. We will check it out and find out what the situation is for consumers.

To return to the point made by Senator Reilly, sometimes there are town vouchers where people can go into their town-----

Photo of Aidan DavittAidan Davitt (Fianna Fail)
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The chambers of commerce.

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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They can buy them. They are supposed to ensure the money is spent in a given town. Many are for one year only. The business model is based on the voucher expiring after one year. I will revisit it. It is very useful that the Senator raised the issue. I will follow up on it. I cannot give an answer. They are very successful for towns so we have to find a way to make sure it works well because it is great to see that people can get those vouchers and spend them in their local towns. They have been really successful in many towns right across the country.

The issue of the public consultation was raised and 23 signed responses were received from consumers. I will refer to the main points made in the responses. Of the respondents, 14 were supportive of a five-year limit or ban on expiry dates or fees. One respondent thought a five-year period was too long and favoured a two-year period. Six respondents stated the fees that currently apply to multi-retailer gift vouchers are reasonable given the advantages and extra protections offered by the products. One respondent raised the question of restrictions on the use of gift vouchers and two respondents gave views on matters not covered by the consultation. There were 20 responses received from businesses that issue gift vouchers or provide technical processing or other services to businesses issuing gift vouchers. A further six submissions were received from business representative bodies. Submissions were also received from the Competition and Consumer Protection Commission, the Consumers Association of Ireland and Deputy Niall Collins.

The majority of business respondents favoured the exclusion of electronic money gift cards from the scope of the proposed legislation. A number of respondents were opposed to a provision empowering the Minister for Business, Enterprise and Innovation to set fees for gift vouchers. Two of the main business representative bodies, Retail Ireland and Chambers Ireland, stated they would not oppose a five-year minimum term for gift vouchers while a third body, Retail Excellence favoured a three-year minimum term for non-electronic money vouchers. A number of respondents, principally the suppliers of shopping centre gift cards, whose revenues derive mainly from balances on gift vouchers unredeemed within 12 months from their issue date opposed the proposed five-year minimum term for gift vouchers. It is a real bugbear for consumers when they have a voucher that is slightly past the year expiry date and they discover it is worth nothing. It is incumbent on us to protect those consumers.

With regard to public awareness, the CCPC website has excellent information. If consumers want to find out about gift vouchers, there is a lot of information there. Senator Buttimer raised the issue of high street retailers and the difficulties they face throughout the country. It is something we are all very conscious of.They can avail of online vouchers at their local enterprise office. I suggest that they do so and get online as well. Through Enterprise Ireland, I launched a fund last year to support businesses in developing a better online presence. It was a deeper support to help them trade online. That is something we have to continue to support.

I thank the Senators who contributed to the useful and informative debate on this Bill. As indicated earlier, I look forward to working with the House on Committee and Report Stages, including in respect of any amendments that may be tabled. This is an issue which has been discussed for many years. With the support of the House, I would like to have the legislation enacted as quickly as possible for the benefit of consumers.

Question put and agreed to.

Committee Stage ordered for Tuesday, 29 January 2019.

Sitting suspended at 3.50 p.m. and resumed at 5 p.m.