Update 13 September 2024
As at 4th September the "Fair Trading (Gift Card Expiry) Amendment Bill" underwent a third reading and was duly agreed to by the NZ Parliament. The new legislation will require all Gift Cards to carry a minimum expiry period of three years from the date of initial sale.
As noted in Rejigit's original article below, in some countries Gift Cards are required to have a minimum expiry period of "five" years and in some cases cards have no expiry date at all. It is disappointing that the New Zealand parliament didn't have the balls to require a minimum expiry period of at least five years. Money doesn't have an expiry date! And why does it take until March 2026 for the new New Zealand regulation to take full effect ?
Since 2020 the New Zealand Commerce Commission has received thirty nine complaints about Prezzy Cards with twenty three of those received in the last twelve months. In terms of customer dissatisfaction that will be the tip of the iceberg.
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Update 19 February 2024
Encouraging news! The New Zealand parliament's select committee for "Economic Developement, Science and Innovation" recently heard submissions on a proposed private member's bill "The Fair Trading (Gift Card Expiry) Ammendment Bill". If enacted the bill would extend the expiry date on all gift cards to three years. That would be a good outcome however an even more encouraging submission was made by Consumer New Zealand, a testing and advocacy organisation relating to consumer protection and information. Consumer NZ submitted that a five year minimum validity period would be appropriate for all gift cards. Hopefully the bill will eventually make its way into law.
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November 2023
It is worth examining Prezzy Card's extraordinary schedule of fees and the very limited expiry period in New Zealand.
..Prezzy Card “purchase fee” $5.95 (deducted from the Prezzy Card) if a card is purchased online.
..2.6% “convenience” fee if purchased using a credit card.
..To have a Prezzy Card sent to you $7.50.
..To check your Prezzy Card balance $0.50.
..Make contact with the Prezzy Card company $0.50.
..To actually talk to a Preezy Card person $2.00.
..Replacement card fee of $10.00 within NZ & $50.00 if a replacement card is sent overseas.
..Disputed transaction fee $15.00.
..International transaction fee 3.5%.
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In New Zealand Prezzy Cards are valid for only two years!
As at 1 March 2018 the expiry period for Prezzy Cards was extended in New Zealand from twelve months to have a twenty four month expiry period. In some countries around the world, the expiry period is “sixty” months and in some cases there is no expiry date.
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The government should legislate to impose a mandatory minimum expiry period of five years for all gift and prezzy cards.
An estimated $10 million is lost in New Zealand annually because gift card holders are unable to fully redeem their credit balances or credit balances are forfeited. Where does that money go?
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Consider these two scenarios.
(a) If you are a Prezzy Card purchaser:
The buyer purchases a $50.00 Prezzy card online - pays a $5.95 purchase fee for the card plus $7.50 for delivery (actual total cost $63.45).
The buyer pays by credit card therefore the total order of $63.45 incurs a further credit card fee of 1.59% and the total cost becomes $65.10. In total, that equates to approximately 30% in fees.
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(b) If you are the recipient of a Prezzy Card:
For example the receiver uses the Prezzy Card to purchase a book for $20 and has a $30 balance remaining. The receiver forgets where they put the card and makes contact with Prezzy Card for a replacement card. The balance of $30 is reduced to $18 as a consequence of being charged $2 for the call plus a $10 fee for the replacement Prezzy Card. In the event the receiver attempts to use the Prezzy Card after the 24 month expiry period they will discover that the remaining $18 has been forfeited.
From the $63.45 the buyer spent on the Prezzy Card, the receiver only actually benefited to the extent of the value of the $20 book purchase and $43.45 has gone the way of the dodo bird.
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A retail merchant accepting a Prezzy Card by way of payment will incur a bank transaction fee equivalent to the percentage that would normally apply for a Visa Card transaction. In some cases a retailer may choose to pass on that transaction fee to the Prezzy Card customer.
