Home » Gift Card Values And Validity – What Your Business Should Know – Consumer Law – Switzerland

Gift Card Values And Validity – What Your Business Should Know – Consumer Law – Switzerland


To print this article, all you need is to be registered or login on Mondaq.com.

If you’ve decided to offer gift cards on your website,
you’re not alone. The gift card industry in Europe was valued
at $140.1 billion in 2021 and is expected to grow fourfold by 2032,
a 12.4% compound annual growth rate (see more here).

Closed-loop gift cards, which are limited to purchasing good and
services at the merchant listed on the card, are a terrific way to
gain new business and increase sales. Open-loop gift cards offer
even greater flexibility, as they can be used in a number of
different businesses. Many of us have discovered a new site thanks
to a thoughtful gift card. Not to mention that most of us tend to
spend more than just the value of the gift card.

Irrespective of the gift card type, if you are going to offer
gift cards on your online retail site, you need to communicate
clear, consistent guidelines on the card’s value and validity
as required by EU legislation. These are usually set forth in the
terms and conditions. Both seller and purchaser are bound by these
terms and conditions at the time of purchase. We detail below some
of our top tips in terms of gift card values and balance,
territorial scope and expiration dates that you should consider
before offering gift cards to customers.

Card values and balance

On your website, you should supply information on any conditions
on the gift card usage, such as how it can be spent and how the
buyer can verify remaining balances. You must also be transparent
on the card value and expiration, and ensure that buyers have easy
access to the general terms and conditions at all times.

In terms of the value of gift cards, the issuer can decide the
maximum value. The EU does not regulate the limits for closed-loop
cards; however, cards bought in cash over €10,000 requires
due diligence to avoid fraud
.

Typically, closed-loop cards are not redeemable for cash. In
some cases, gift certificates or gift cards may include such an
option, allowing the holder to exchange the card for its cash
value. Cash redemption options should be clearly covered in the
terms and conditions as noted above. In some countries there may be
laws that require gift certificates or cards to be redeemable for
cash.

Territorial scope

Thanks to the end of geo-blocking in the EU, since 2018,
consumers can order gift cards from sites in other EU countries
than their own. However, gift cards can have territorial
limitations. So, for example, if someone buys a gift card on
Kipling French site, they can only spend it on that site or in its
French shops, unless stated otherwise. If this is the case, you
must clearly inform your customers that they will not be able to
exchange the gift card for a gift card for any other region.

Expiration dates

In the EU, there is no uniform approach to expiration of gift
vouchers, so the vendor can typically set the validity period.
However, a 2020 EU decision confirmed that the validity period for
gift cards is considered material information that must be
communicated to consumers.

EU Member States do have their own specific regulations on
validity of gift cards and vouchers. Minimum expiration dates range
from no duration in Italy to 30 years in Austria (when no validity
is set by the vendor).

After expiration, the card holder does not usually have the
right to get a refund or extend the card duration. Vendors can
stipulate this in their terms and conditions. One exception is
Denmark, where gift cards may be refunded for a year following the
expiry date.

Increasingly the EU can’t be looked at as a single territory
for the purposes of gift card regulation, so one should expect
different levels of rules in EU Member States.

Conclusion

In conclusion, gift card rules vary by country and different
provisions can be set by the issuer, depending on the topic.
However, value, territorial limitations and validity will always be
considered material information for the consumer and should be
clearly shared prior to purchase.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

POPULAR ARTICLES ON: Consumer Protection from Switzerland

Legality Of Banking Fees In Serbia: The Tipping Point

Schoenherr Attorneys at Law

What started as a typical consumer protection claim, designed to create a fairer, more transparent banking market, ended up in mass claims fundamentally challenging the right of banks to charge…

New Warranty Rules: Old Wine In New Bottles?

Schoenherr Attorneys at Law

Two new directives are trying to shape Europe’s warranty rules. Member States must apply the Digital Content Directive (“DCD”) and the Sale of Goods Directive (“SGD”) from 1 January 2022.