The Hon. J.A. DARLEY (17:13): This bill will introduction a three-year expiry date on gift cards which are purchased in this state. The government have undertaken further consultation to iron out problems posted by vouchers and items such as those available in the Entertainment Book. It does not apply to reloadable credit cards or items like iTunes cards.
Since New South Wales introduced similar legislation, some national companies have taken the step to get rid of expiry dates altogether for their gift cards. The intention behind this legislation is to help consumers by giving them longer to spend the value of the gift card, reducing the likelihood of people having to make an impulse buy for items they do not really want or need just because the expiry date is looming.
Although this is a seemingly good move for consumers, research from the US suggests that whilst consumers are nearly all supportive of extended expiry dates, consumers are less likely to spend the value of a gift card if they are given a three-year rather than a one-year expiry date. These studies which looked at the procrastination of pleasurable tasks found that participants were less likely to complete an enjoyable task if there was an extended time limit, rather than a shorter one.
In one of these studies, participants were given a voucher for a pastry and a coffee. One group's voucher had an expiry date of three weeks and the other had a two-month expiry date. The results showed that there was a redemption rate of 31 per cent for those who had a three-week expiry and only a 6 per cent redemption rate for those with a two-month expiry date. People seemed to delay the redemption of the voucher because they wanted to save it for a time when they wanted a treat, rather than frittering it away. The study demonstrated that, whilst people are supportive of longer expiry dates, behaviourally it reduces the likelihood that gift cards would be redeemed.
The move to extend expiry dates is especially good for retailers, as people are more attracted to purchasing gift cards with longer expiry dates; however, people are less likely to redeem them. If a retailer becomes bankrupt, gift cards are not honoured. Research conducted in the US also shows that those who receive gift cards treat them differently to the same amount of cash. Rather than purchasing items with the same value as the gift card, most recipients ended up spending double the amount compared with the same amount of cash. People deem the money to be a bonus and put it towards a bigger ticket item, which they may not necessarily have purchased if they had not needed to redeem the gift card. Again, this is a boon for retailers as people end up spending more.
I understand the opposition has filed amendments which will cause a review of this clause. Given the above, I am very supportive of this amendment and look forward to seeing whether the move to extend gift card expiry dates will result in the desired outcome of reducing wastage. I support the bill.