Fair Trading (Gift Card Expiry) Amendment Bill

I’ve just got a little bit to do before we start. I appreciate your keenness, though. Members, the House is in committee on the Fair Trading (Gift Card Expiry) Amendment Bill. The bill is drafted in clauses. Members will debate the bill clause by clause, starting with clause 1. Members may wish to consider Speakers’ Rulings 127/2, which indicates that clause by clause debates are generally narrow and should confine themselves to the words of the particular clause and issues contained in them. Members, we come first to clause 1. Clause 1 is the debate on the title. The question is that clause 1 stand part.

I move that this question be taken as one part.

CHAIRPERSON (Maureen Pugh): Are you seeking leave for that?

I seek leave.

CHAIRPERSON (Maureen Pugh): For that.

For this question to be taken as one part.

Leave is sought for that purpose. Is there any objection? There appears to be none. The new question is that clauses 1 to 10 and Schedules 1 and 2 stand part.

Kia ora, Madam Chair, thank you for this opportunity. This is non-controversial; it just seems like a common-sense piece of work. I just want to note, as I come to my question to the member in charge of this bill, Dan Bidois, that this has had a life of its own, this piece of legislation. It’s gone from the Hon Jacqui Dean, I think it then moved its way to the Hon Melissa Lee, and now—I’d say “the not so honourable”—the member Dan Bidois is shepherding this through the House. I just want to commend you on taking this.

I think, from our perspective, it is good to see. I know that, for myself—and, I think, if you look at the research, you’ll see that gender norms are one of those challenges—men are terrible at this thing. I did look through my wallet this morning, and I do have two expired cards. Sorry to whoever gave them to me for my birthday three years ago.

Anyway, I just want to reflect and ask the member in terms of looking at new Subpart 3A of Part 4A, inserted by clause 5, which, obviously, is the main body of what this is about: the definition. Also, I guess, in general comment, if I can, and then to go into my substantial question, really, it’s around the definition of, obviously, what a card is. I just want to ensure that the definition—and I know it does talk about things like vouchers. I guess, when we say gift card, when it says it on the tin, it’s actually a plastic card, but the question really is: when it comes to gift cards and vouchers, how do we make sure it’s really clear that this is purely online? For example, an app you might have with Barkers, or the Barkers website, as an example—not that I have any expired ones from those; that’s way too flash for me.

The question is just to clarify around the definition, particularly looking at Subpart 3A, section 36WA(d), “a card or voucher supplied”—it says that several times through, “a card or voucher”. I just want to make sure it’s not—because, obviously, as the world continues to move on, how do we make sure this legislation is enduring, so that, actually, it’s not just a physical card or a physical piece of paper or something you get out of your birthday or Christmas card; it actually is the fact that it’s on your phone or the fact that it’s on a website that you access through your emails.

I guess my question is, just to confirm: can you give us assurance that it really is clear that a card or voucher is something that is electronic, is something that is in the cloud, that is something that’s on an app, rather than just a physical document?

💬 Dan Bidois: Do I need to?

CHAIRPERSON (Maureen Pugh): Yes.

💬 Dan Bidois: OK—Madam Chair.

CHAIRPERSON (Maureen Pugh): Dan Bidois.

OK—sorry. Look, it’s a pleasure—thank you very much to the honourable member for the question. Before I answer it, I’ll just maybe say thank you to Minister Melissa Lee and to the Hon Jacqui Dean, of course, for originally shepherding this bill to this stage—it’s my pleasure to take it on board. Unlike the member, I actually don’t have an issue with spending gift cards. In fact, if you ask my wife, I try and do it as quickly as possible and try and get the full value of such gift cards. So, look, it is a good bill. I just want to also thank the Economic Development, Science and Innovation Committee for their work in shepherding it to this stage.

The aim of the bill really is to make sure that consumers get full realisation out of gift cards, therefore applying a minimum expiry date of three years. To the member’s question, the bill actually is very clear on the definition of what is and isn’t a gift card. The select committee, which I’m actually a member on, spent quite a lot of time discussing the extent of what is and is not a gift card. Allow me to just clarify for the member that any kind of electronic gift voucher or card is included in the bill. If there is a Barkers gift card that you have on your app, then that will, of course, come under the definition of the bill. The key here is that they are gift cards or vouchers redeemable for goods and services. I say “redeemable for goods and services” because there are other such cards that are, of course, redeemable for cash, for example, and that wouldn’t come under the bill. That, I think, answers your question of what the definition is of a gift card.

Also, just to take note that the select committee spent a fair amount of time talking about open loop versus closed loop gift cards. Just for the committee, a closed loop gift card is, essentially, one that you get and it is typically redeemable for one place or one chain in New Zealand. An open loop gift card is, essentially, one that is redeemable for many different types of retailers. The place where the select committee got to is to include open loop gift cards. That covers things like Prezzy Cards, which are actually redeemable for a dollar value at any particular outlet that comes under the Prezzy Card family. That’s what is included in the gift card definition.

There is, of course, a clear set of things that are not included as gift cards. I’m happy to go through that as well while I’ve got the time. Goods supplied, or cards supplied in substitution for return goods—for example, if you take something back in, you get a gift card as a result—is not included in the definition. Prepaid cards for utility services are not included in the definitions. Debit or credit cards—things that you can withdraw cash with; typically supplied by financial institutions—are not included in the definition. Cards supplied as part of a customer loyalty programme are not included in the definition. For example, if you get enough points with Air New Zealand and Air New Zealand gives a New World voucher, then that actual voucher is not required to have a minimum expiry date of three years.

There’s also other areas that the select committee talked about with respect to cards or vouchers at limited events. For example, your Gisborne once-a-year annual events or things like that—you won’t need, actually, a minimum expiry date for.

Finally, second-hand gift cards. If you on-sell a gift card, you won’t need to have a new expiry date. Of course, there could be a private market for gift cards, but part of that is just the practicality nature of as well. Also, cards sold for charitable purposes are also not included in the bill.

Thank you, Madam Chair. Firstly, I need to thank you and acknowledge all the members who carried that bill before, including the Hon Melissa Lee, and now we’ve got Dan Bidois carrying the bill as well. I think it’s a very great bill, but I’ve also got a question.

I would like the member to explain to me a little bit, especially on new section 36WA. Just now, the member has mentioned some of the cards being excluded in this bill. But, from my personal experience, when I’ve received some gift cards, I’ve used my own money to buy the gift card, or if I actually use my loyalty programme or bonus points to obtain the card, or even if I just buy for a charitable purpose, I don’t see my gift card as different. For example, if it’s six months later on, I probably can’t tell where I got my gift card from. How can I know whether my gift card is included in this legislation? Do you think that will create some kind of confusion for people as well? When we get the card, we probably don’t know where it’s from or can’t remember where it’s from again.

So it would be great if you can actually give a little bit of explanation as to why the select committee decided to exclude all these gift cards with different resources. I’ll be grateful for some clarification. Thank you.

Thank you very much to the member for the question. With this bill, we heard from a number of submitters in the select committee. Look, the vast majority of gift cards in New Zealand are actually used in a rapid period—so within, really, a six- to 12-month period—but there are, of course, a range of New Zealanders that have unexpired gift cards, like the member had mentioned before. Actually, when you look at the proportion of gift cards that this bill covers or it aims to cover, it’s actually quite a small amount.

The next question that the member may wish to ask from that is around why we excluded things or why we included things in the definition of what a gift card is. A part of it is the practicality of this bill and not wanting to over-engineer it or over-police or over-regulate. A part of it is also, actually, to not penalise people that haven’t actually purchased a gift card. The intent of the bill is, essentially, that for those that purchase a gift card, it is very clear to them the period in which they can use it. If they on-sell it or if they then go and auction that same card for a charitable purpose or if they keep it in their drawer and use it for some other type of activity or gift it along to somebody for free, that is something the bill is not really intended to cover.

So that really is, in a sense, why the bill is quite narrow in its definition of what a gift card is. The select committee dealt with this, and the advisers in the select committee were very clear that the definition of what a gift card is needs to be very, very clear. That’s why there is a section in there, and particularly in the commentary as well, around the definition of a gift card, because otherwise you’ll have instances where businesses may try to actually skirt the law to get around what a gift card is so that they don’t need an expiry. Hopefully that addresses the member’s question around the definition of a gift card.

Thank you, Madam Chair. I want to congratulate the member Dan Bidois yet again for shepherding the Fair Trading (Gift Card Expiry) Amendment Bill through the Economic Development, Science and Innovation Committee in such a capable way. I’m here really to reflect that this is an inconsequential bill in many respects, but, nevertheless, you’ve given it great care and carried it through, and we are here debating it. I do think we could be talking about things like, you know, de-carbonising our electricity system or having more clean cars, etc. But here we are, and so I am pleased that we are going to get this bill sorted once and for all.

I just wanted to think about Subpart 3A, the gift card expiry dates. It is such a detail, but if we are in such detail, why not go there? I don’t want to deny the member the pleasure of explaining in full this bill. I do think it has been worked through, it has been considered, it has been tossed back and forth. I actually feel as though it is part of my family now—not a friendly part of the family; not a confrontational one, either. So when we look at new section 36WC, “Expiry date must appear prominently on the gift card”, what is that going to look like? I don’t really care. But we do need to know that it’s got to be there somewhere, and, you know, it sort of says it’s got to be there in some way, shape, or form. I do remember this being a part of the conversation that we wanted to make sure, because we’re making a change. People knew what they were buying, they knew when it would end, and they did not—as my mother-in-law will do—forget about it in a drawer as other people would do.

I know that many members here don’t use gift cards; they prefer cash. But, for those people who do, for those people who care about these things—there are some people even in the House who care about these things, clearly—how are we going to know? How are we going to be able to see very clearly what the expiry date is? I’m sure the member will be able to give a really good account of just how we’ll do that and why this is just so important.

Thank you, Madam Chair. First of all, congratulations to the member and to my friend Melissa Lee, who was earlier the one who had this bill drawn.

While I agree that it’s really important we deal with climate change and many very important issues, I know that this is an issue that will impact on people, because it’s hard earned money that’s there.

I also note, after the discussions that were just had in this committee session, that the supermarkets, when we asked them how much money they had, actually—

💬 Dr Vanessa Weenink: Point of order, Madam Chair. Sorry, Madam Chair. The clock wasn’t—

CHAIRPERSON (Maureen Pugh): Restarted? Oh, they’ve done it now. Thank you very much.

Thank you. We asked them how much money is actually being lost to consumers through these cards. They actually wouldn’t disclose that information because it was confidential. So we actually don’t know how much slippage there is that goes to our supermarkets, which are making quite big profits at the moment.

One of the stories that was told—I think it was pre this, but it was brought up as part of the prep that we did for this—was Mobil putting an expiry date of one year on a $1,500 petrol voucher that had all that money for a long time. And if somebody loses it overnight—it’s a big deal to a family to lose that.

I’d like to draw your attention to the fact that while this was passed by the majority, which means that it was supported by most parties in this House, it was not supported by ACT. ACT in its statement say that we must leave it to business. I’d like the member in charge of the bill to explain why we might not leave it to business in this case; why this might be a real problem for people.

I’d also like, while I’m here, to ask for a comment on the penalties, because this was a piece of work that, as a select committee, we did make quite a radical change in. We have put in quite a high penalty here for not abiding by this. I would like the member to address that and get a chance to explain that, because that was a situation where it really was discussed and a decision was made to put in quite a high penalty. My understanding of that is we put in a higher penalty because people do calculate—well, we’d like to believe everybody is well meaning. People do calculate sometimes and leave these things out and people do get hurt. I would like to hear the member’s view of why we are doing that.

I’d also like to have a little bit of commentary, if possible, on the transition period, because we did make a decision in the committee that this would be a bill which we would give an 18-month transition period to, after Royal assent. Why does the member believe that that was a good idea? Why did we do it?

Finally, I just want to draw—actually, I think the member has addressed the issue of charitable purpose, so I’ll leave it there, but thank you.

Thank you, Madam Chair, and thank you, members, for your questions. To the member from the Green Party’s questions around the expiry date: the bill sets out very clearly in new section 36WC the rules for all issuing of gift cards—essentially, that they must display those expiry dates very clearly. At least one of the following: the expiry date, the month and year of gift card access, the date the gift card is sold, or the words “no expiry date”. It’s quite clear the rules and requirements for businesses and organisations that are selling gift cards and what should be presented. To the member’s question: of course, yes, this isn’t solving climate change or improving the productivity of this country, but it is about fairness and it is about making sure that we are doing everything possible to help Kiwis through a cost of living crisis. It is a small change, it is a good change, and I would certainly encourage all parties in the Chamber to support this bill.

To Helen White’s questions, in terms of the minority report from the ACT Party: if I just go to their key arguments that the minority report, essentially, had, and I’ll address those in turn. One is around the unnecessary burden that it places on businesses. Well, we actually have heard in select committee—and I’ve heard from businesses who actually are really supportive of this change and its going through—that it takes away the ability to manage liabilities and financial sustainability. Well, we’ve actually heard that by putting clear rules around expiry dates that, in fact, businesses will be able to have a clear understanding of their liabilities on their balance sheet because of such an expiry date in the future. With respect to leaving it to businesses to decide this: look, again, it is a simple change that businesses and consumers want. We require all sorts of things from businesses, whether it’s the way they set themselves up, the reporting requirements; this is simply a very small requirement for the number of businesses that are involved in the production and selling of gift cards to the country. That addresses the minority report.

The second thing that the member Helen White mentioned was around the penalties. This was well-traversed in the select committee. The penalty regime puts an up-to limit on it that the Commerce Commission will then be able to determine. The maximum amounts are high, and I’ll just go to the section itself which refers to it. The maximum amounts around the infringements are up to $10,000 for an individual and up to $30,000 for a body corporate. That may sound quite high, but it’ll ultimately be for the regulator to determine the nature and the gravity of such an offence and have an appropriate response and infringement because of that.

The next the member had, just in my remaining minute, was around the transition period. We’ve given a transition period for businesses of 18 months. Now, for most businesses, that was actually about the time that they wanted. There are businesses that would like a little bit more time, but who I am confident will adjust to the change. That’s why we extended it to 18 months to allow for businesses to update their systems, to update their training manuals, and to make sure they get rid of their existing stock of gift cards, because those are the ones that actually will not have expiry dates on them.

Thank you, Madam Chair. You’ll have to forgive me if I sound a little bit like the MP for Wairarapa at the moment. I don’t have a lot of voice this week. But I do want to speak on this bill. In particular, I want to ask the member about the three-year time frame and how we landed on that number. We’ve heard some examples from the other side of the committee, particularly all of them so far are around large corporates. I’m more thinking about the smaller businesses in the Horowhenua and in Kāpiti that are impacted by this.

I think we’ve all had the experience—I have to confess that, at Christmas last year, when I was eventually persuaded, convinced, told to tidy up the wardrobe, I found a Mitre 10 gift card from the previous Christmas, which had then expired, of course, because it’s from the date of sale, not the actual date of Christmas when I got it. I always love to support Vince and Trish; they do great stuff in the community, from our local Mitre 10. But we’ve all had that experience.

How did we shift to three years and how is it that we landed on exactly three years? I think about the small businesses in Ōtaki that are potentially impacted by this. I’m interested to know the feedback that you had during maybe the select committee process, and, of course, as you’ve traversed this bill through the legislative process with that three years. I was pleased to hear the comment, if not surprised, from the other side of the committee, there was a petrol station example, and, hey, this is Kiwis’ hard-earned money. I commend that view from the other side of the committee. I wish we had it for the last six years when they were spending taxes, to be fair. It is people’s hard-earned money. How did we land on a balance of three years?

I understand the purpose of this bill is, of course, to extend the longevity of these cards, to extend the date range through which they can be used so that Kiwis get a fair shot at using what they have invested—to use that expression—their hard-earned money into, to make sure they can actually redeem it and use it. But, of course, there has to be a balance to this, these gift cards. Although I acknowledge the company has received the money at one point in time, they ultimately become also a liability on the books for businesses. As time goes on—and I think that’s the last six years and rampant inflation that we were suffering, of course—what was paid for for $20 at one point, three years later—

💬 Cameron Brewer: Worth nothing—worth nothing.

Well, there’s some truth to that, right? Suddenly, the liability level changes. There has to be a balancing of these points, a fairness to Kiwi consumers to be able to go and redeem what they paid for, or their loved one who maybe gave this to them as a gift, but balancing that against a pragmatic approach to the small businesses that are doing their best.

I think of another great local business in Otaihanga that I was speaking with recently. They were saying that the business being sold impacted a number of regulations, but there are a number of our smaller businesses that maybe don’t have the full reckons of exactly what liability they hold in terms of some of these vouchers, and if it’s three years down the track, it sold after two years, how much of a liability is this? That may present some issues.

I’m interested in how it is that we were able to land on that three-year period. It seems to me that that’s a pretty balanced view that you’ve taken, but I’m really interested to know perhaps what feedback you’ve had. Have you heard from small businesses, and not just the big chains that we’ve heard about from the other side of the committee but from the small businesses, the local businesses, mum and dad that have been going out there?

It was a good point that was made about different forms that these cards and vouchers can come on—online, through apps. I think the spirit of the intent of the bill is pretty clear in terms of what you want to capture. For these smaller businesses, what feedback specifically have we heard from them? Was there consideration, for example, given to a two-year or a five-year or not even having a limit? I heard from some people, earlier on in the process, that maybe there shouldn’t be a limit at all, that once there is an exchange of monetary value, should there be that? I think, as I’ve said, we have to balance up the pragmatic approach for these businesses, that there must be a finite point so that that liability can be moved off the books one way or another. There is some fairness that if you’ve got this, albeit it might be lost in my wardrobe, but it needs to be spent at some point. I don’t think we want that to carry on for ever.

I wouldn’t be doing this justice if I didn’t represent the small businesses from places like Foxton and Levin and Ōtaki, from Waikanae, from Paraparaumu, and just making sure that we have heard from those businesses. Have we heard that and did that support us landing on this date of three years in terms of balancing up the consumer and the business needs? I’d be interested in hearing the member’s comments on that.

Madam Chair, thank you. I thank the member from Ōtaki for his question. I know that it comes from a place of strong advocacy for the small-business community in his electorate.

There are a lot of gift cards that currently have around a 12-month expiry date. The Economic Development, Science and Innovation Committee actually heard a range of submissions around different levels and length of periods for the expiry dates. Actually, in fact, if you look overseas, the US and Ireland have a five-year minimum term for expiry dates. Canada actually doesn’t have an expiry date limit, so it actually requires no expiry date on it at all. So the select committee considered a wide range of recommendations around the level of years for the expiry, and the committee felt that, actually, the three years we landed on was about the right balance, which is what the member wanted to hear about.

Personally, I think there was a sort of strong case to go even further, and we did have submissions that were advocating for such. Where we landed was certainly that three years was about the right balance—the balance between empowering consumers but also making sure that businesses don’t end up with a perpetual liability on their balance sheets.

In terms of the member’s questions around consulting really, really small businesses, we did have submissions from, for example, Booksellers Aotearoa New Zealand that does represent a lot of small, independent booksellers in New Zealand; also, Retail New Zealand, which represents a huge amount of small retail outlets across the country, and they were certainly of the view of, actually, I think, supportive of at least a three-year minimum expiry, or further.

So, again, the member’s questions, I think, really were about balance. I think the select committee got the right balance based on the submissions and the feedback that we heard in the select committee process.

Kia ora, Madam Chair. Yeah, I don’t want to prosecute too much more because obviously we’re in almost all agreement across the House. But I have got some amendments on the Table, so I thought I’d just quickly address them just to sort of check in because, you know, I mean we’re probably towards the end of litigating—we’re repeating ourselves a lot.

I just thought what I would—firstly, the member mentioned around the 18-month time frame. I have an amendment to replace 18 months with 12 months just to, like—what I see is most people are ready to go and it’s actually not a lot that needs to be done to change the systems. Why would it be 18 months? Why can’t it just be 12 months? I know you had conversations in the Economic Development, Science and Innovation Committee about this.

Secondly, this is around clause 1, the title. Currently, it’s the Fair Trading (Gift Card Expiry) Amendment Bill. I thought we could replace “Gift Card Expiry”, and there’s a few options I’ve put on the Table. “Gift Cards Consumer Protection” is one I thought sort of said more about what this is actually about. The second one I had was “Consumer Rights for Gift Cards” or the “Gift Card Expiry Protection” or “Fair Gift Card Expiry”. The reason I’m using these words is really—and I did hear earlier from across the floor—around fairness. It’s actually around fairness. It’s around the consumer in terms of this is money we’re talking about. We’re actually just talking about cash in different forms. I guess I have those on the Table. I don’t want to go on too much longer because I think we can kind of come to agreement on that.

I sort of think I really want to put on the table to you the 12 months—why not? And then the title, potentially, just so it’s actually, you know, a powerful statement when you talk about fairness, when you talk about protection, and when you talk about consumer rights. So those are my amendments on the Table. I look forward to hearing from the member.

Thank you, Madam Chair. Well, Glen Bennett’s stolen my thunder because I was going to talk about this exact same amendment. He’s actually cut himself short because there’s 10 full amendments on this paper and he’s only read out a few of them. One of my favourite ones is the “Gift Card Extended Expiry for Forgetful People” title. Now, I thought that’s quite harsh. And I think that’s a direct attack on Cameron Brewer, I think that is.

I wanted to ask some questions around how this particular amendment would actually work. I know in the past when you put a number of amendments up, they can be tested one by one, to a point, to get a sample of whether or not the committee is in favour of the particular amendment or not. I know Mr Bennett has listed 10 amendments here. The question, I think—and this is probably a question for the presiding officer rather than the member in charge—is whether or not we get the opportunity to consider those all one by one or perhaps at the end we’ll take one at a time, or whether this is an entire amendment on one tabled amendment.

If you read this amendment literally, what you’re asking to do is you’re asking to delete the words “Gift Card Expiry” and then replace it with 10 different titles. I’m not quite sure how that works as one amendment on one paper and whether or not we have to put these on 10 different amendments. It’s been a long time since I’ve done one of these, but I wanted to just raise that as a point that the member didn’t actually manage to address and get to. I won’t read through all 10 of his very exceptional amendments that we’ll hopefully get to consider later on, but maybe some other members would like to address them as well.

I just wanted to congratulate the member in charge of the bill. I was speaking to him earlier today and he said that this is—and he literally said this—the third best day of his life. You know, birth of his child, marriage to his wife, committee stage reading of the Fair Trading (Gift Card Expiry) Amendment Bill. And, look, I tell you what, what better gift on a wedding day or for the birth of your first-born child than a gift card? I’m not sure—I don’t have any children—where you would go shopping for a delightful cot or a pram or children’s clothing. But what about just the fundamental go-to gift card of a Prezzy Card? You know, the catch-all.

What do you get mum for her birthday when she’s over in Australia on a cruise and when she gets back, you want her to spend her money here in New Zealand. What about a Prezzy Card? Hey, that’s the one thing that people can rely on. Then, lo and behold, you give your mum the Prezzy Card for her birthday on 7 August and then it gets to 8 August 2025. She looks in her wallet, her pocket, and all of a sudden the $150 gift card that I’ve generously given to my mother for her 60th birthday—unable to be used. This is the problem that this bill is trying to solve.

It’s the problem of lost Prezzy Cards, lost Mitre 10 cards, and it’s the problem that the member in charge of the bill has so successfully prosecuted today.

CHAIRPERSON (Maureen Pugh): And does the member have a question?

Oh, a question to the member. Well, I was getting so carried away. I guess the question to the member is, well, first of all, does the member consider any of Glen Bennett’s amendments as something worth considering by him, by the committee of the whole House? I know he’s the member in charge of the bill, and I think, generally, we should defer to what the member in charge of the bill would like the bill to be called. But, in terms of the amendments put forward by Mr Bennett, I’d be interested to know what the member’s thoughts are on that. Then, of course, we’ve got the second amendment, which was the 18 months or 12 months. I would like to know why we need 18 months to get this in place. I mean, it might have something to do with the fact that most gift cards are expiring at 12 months and so you need that little bit of lead in time afterwards. I’d be interested to know about that.

I actually have something to disagree with the member in charge of the bill. He mentioned a couple of calls ago that, you know, this bill won’t solve climate change. I think that’s selling this bill a little short because can you think of the tens of thousands of plastic petrochemical-derived gift cards that are floating around in the world that have to be renewed year after year, printed and developed year after year after year, filling up our landfills, filling up our waste sites. What this bill may do, surely, it’s going to reduce the number of plastic gift cards by at least two-thirds, if my maths is correct. Actually, I don’t know if the maths is correct there. Let’s not sell this bill short. It may go some way to reducing the impacts of climate change by reducing our reliance on plastic gift cards.

Finally, I’m surprised to hear that Canada has an unlimited gift card expiry in their system. Those crazy Canucks, eh? But I wonder if we were to ever enter into a purely free-trade agreement with Canada, what implications would that have? What if I brought a gift card in New Zealand which could be used over in Canada? What’s the expiry date there? How do these gift card expiry rules transgress international boundaries? If it’s unlimited expiry in Canada, can I send my Prezzy Card over to my brother who’s studying over in Canada, get him to hold on to it and have the expiry be unlimited until I want to spend it on some goods and products to bring back to New Zealand? There’s a number of questions there for the member that I’d be very interested in as we just get started on this debate this afternoon.

Madam Chair, thank you, and thank you to the members for your questions. With respect to the transition time, yes, I think the bill as it was introduced to the House had a 12-month transition time. The feedback from the Economic Development, Science and Innovation Committee—and, in fact, there were several submitters in that select committee process that specifically asked for longer, particularly if Prezzy Cards were going to be included as part of the definition of a “gift card”. That is, in part, because of the volume of gift cards, as member James Meager from Rangitata mentioned, that are in circulation. There’s a lot of gift cards that are actually about the 12-month expiry date, so, in fact, an 18-month deadline gives the chance for businesses to clear the backlog of those that are in circulation and then begin issuing new ones with the expiry date. But it’s also really for making sure that the businesses have the systems in place and that they also have the training in place for staff to be able to actually go ahead and deal with this change.

It was actually on the basis of that that the select committee chose to extend the transition period for this bill from 12 months to 18 months. Believe it or not, there are businesses out there that issue gift cards that would prefer to have slightly longer. I think that this is about the right balance to get this bill right. It is about fairness. It is about striking the right balance between consumers and also businesses. And in a cost of living crisis where everything matters, we want to make sure that consumers have full opportunity to take advantage of those gift cards, and also that businesses can minimise the cost of actually transitioning to such a new arrangement. I think we’ve got the right balance there for that.

In terms of the member Glen Bennett’s proposed changes to the name of the bill, I think the name of the bill is a fair representation of the intent of the bill, which is gift card expiry. Certainly my view is that that is the appropriate name of such a bill.

Thank you, Madam Chair, for the opportunity to take a call on this bill. I’ve got a number of questions from a technical perspective on this bill. Hopefully they have been considered through the process. I know that this is a good bill and the sort of thing that we need to have changed. I was looking on my counter this morning at a gift card, and I actually don’t know when it expires. I am worried about that, which leads to my first question, because I know that we need to keep this focused on the bill. But, as I say, I have a number of questions that might take me more than one call to ask them all.

The first is: did the member consider, in this process, having different expiry dates based on the value of a gift card? I’m thinking of the card on my table at home. I think it’s a $20 one I was given. I understand if that needs to be a bit quicker—it could be a year, could be two years, could be three years—but a longer expiry for the larger-value gift card, such as the one mentioned by my learned colleague the member Rangitata.

This leads into my second question and a concern I have around the bill, as a chartered accountant, from a financial perspective, from the perspective of annual financial accounts: how much consideration and testing occurred around the compliance costs that this will add to business? If it’s a year that you have for a gift card being expired or expiring, then there’s an argument to say it’s immaterial if it’s not included in the accounts of a small business at the end of their financial year. But, if it’s three years, how much thought was given?

I’m really asking this question not to challenge the bill and the fairness and the core of the bill, but rather to get guidance from the member to small business owners listening to this inquisitive parliamentary session this afternoon about the implementation of the bill post it being passed by this House—maybe not this evening, but in due course. What testing occurred around the compliance costs that would be added? Did, for example, the Australia New Zealand institute of chartered accountants submit on the bill and the cost that would be incurred around consideration? Was there any thought given to what would have to be provided as evidence to back up the liability that will now sit on the balance sheet of businesses? That really is part of my second question related to new section 36WC, “The expiry date must appear”, and how that relates to liability.

Turning then, as part of that thinking, to the role of startups. I know our Minister of Finance is very keen for us to be encouraging business. We need more business to support the productivity growth we need in this country after six years of challenge. I’m just concerned whether or not any consideration was given to the mental wellbeing of people who are looking to start up businesses and the infringement-offence regime that will be brought in with this and whether there’s an ability to differentiate.

I’d be happy to provide an Amendment Paper, if the member was supportive of this sort of thinking, to allow that start-up, that new business, those people that are taking some money from friends for a voucher for something that they’re looking to get going, to have a little bit more flexibility as to how they go on the journey of starting a business, versus the larger organisations, the corporates, the franchises that have a much more organised system for the management of gift vouchers and cards. I’m thinking about this in the context of when I advised businesses.

I might need to take another call on my other questions. But, in my prior role when I advised businesses, one of the things I always said to them was, “If you can’t get people to buy what you are promising, what you’re looking to do, then maybe it’s not a good idea.” Often a voucher would be a way of doing that, of starting that journey. So I am genuinely concerned about the difference between the start-up businesses and the larger companies.

Before I take the next call, can I just say this is quite a small piece of legislation and the scenarios are very nice to hear, but I think we’re drifting quite wide of the mark. I’ll just ask members to come back to the specifics in the bill.

I move, That debate on this question now close.

Before I take the closure motion, I’m just warning members that we need new material. Otherwise, I will take a closure. Carl Bates—if you’ve got further questions.

Madam Chair, I have one last point, and I will make it quick—I will make it quick. In relation to the “gift card” definition—and it’s noted here that it means “means a card or voucher” etc., and I won’t read out the full definition. But I did have three questions related to that around what it excluded or included, because, in my mind, a card is something physical. So I wanted to ask: does the definition of “gift card” include virtual gift cards, or are they excluded? It doesn’t say they’re excluded.

💬 Glen Bennett: Repetition. We’ve asked that.

This is new. It doesn’t say they’re excluded, but it doesn’t also say they’re included. I did want to clarify, in terms of the intent of the legislation.

The second part of the gift card question relates a little to what the MP for Rangitata said before around the international context. If a voucher is sold in New Zealand, is there a distinction between a domestic gift card—so one for a domestic business—and, for example, if I was to go online and buy an international music voucher for my wonderful wife to say, “I love you”, this evening, would that be included in the definition of “gift card”?

Those were my questions. I don’t have any new material other than those questions, but I would appreciate answers from the honourable member to the questions I have raised this evening. Thank you.

Thank you, Madam Chair. I wish to thank the member from the Whanganui electorate, Carl Bates, for his thoughtful questions; I know this comes from a place of strong advocacy in his local electorate.

The questions that he raised around different expiry dates for different values: we didn’t consider this, and it would actually make the bill very difficult to enforce. For simplicity terms we just want one blanket expiry date that all businesses and that all industries can adhere to when looking after and issuing gift cards.

The second is around testing compliance costs for businesses. The Economic Development, Science and Innovation Committee didn’t really get specific advice around it, but we did ask submitters around the likely costs. Firstly, most if not all businesses in the select committee process were very, very supportive of having a standardised and consistent process for the expiration of gift cards. When we inquired about what are the types of costs that businesses face, the largest cost was really around the physical gift cards that are already in circulation. That is why the select committee chose to make the transition period long enough so that those organisations that produce and sell gift cards have enough time to clear their backlog—and some companies actually have quite a substantial amount of gift cards in their production facilities—to make sure that they can get rid of those gift cards and prepare the new regime going forward. The other costs that we explored was, certainly, around the training requirements involved, the IT systems as well, and the physical systems around the recording of the expiry date in the gift cards as well.

The member raised points around mental wellbeing of start-ups and whether the infringement fees impinge on that. The infringement fee that was mentioned is an “up to” limit and that accounts for the size and the extent of such an offence in New Zealand. If you were a small business and you were caught selling gift cards, then the authorities and your regulator will be able to take that into account and penalise you in the order of the magnitude of such an offence and the size of the business. Then, on the other hand, if there are, in fact, businesses, for example, large corporates who display a recurring and ongoing flout of the law, then the regulator will be able to take that into account as well. So that is why it is an “up to” figure. Certainly it doesn’t look good when you read the law, but the good news for this House is that most small businesses and start-ups don’t read the laws. They just get out there and they just start up a business and they read the laws retrospectively when they’re required to. That addresses this issue.

The last question the member had was around the inclusion of online gift cards and, as I previously stated with the honourable member Glen Bennett, online gift cards are actually included in the definition of this bill; that is included in the definition because of the nature of more and more gift cards being issued. Thank you.

I move, That debate on this question now close.

I call Vanessa Weenink, but just before the member starts, I have been watching this debate about the expiry of the gift cards, and I actually feel like a lot of the points in this debate have expired. I’m really, really looking for new things. Thank you.

Thank you, Madam Chair. I can see that my colleagues on this side are very enthusiastic and have got more questions to ask, which is great. There’s some—

CHAIRPERSON (Barbara Kuriger): Just make sure they are questions and new ones.

Yep. There are some areas that we haven’t traversed very much at all, and we’d just like a little bit of clarity around them. This is a really important issue for some of us who have those cards sitting in our wallets. Like Catherine Wedd explained really eloquently during the second reading, she told a great story about how her husband had a way of trying to make sure that they actually used those gift cards. He stuck them to the inside of the wardrobe to try and see whether or not they could actually use those gift cards. People are trying all sorts of things. Now, one of these—

CHAIRPERSON (Barbara Kuriger): Which clause in the bill does that relate to?

The clause in the bill that I’m going to ask the question about is about the transport and utilities, and ask why it was that we decided to exclude those ones, because some people like to have pragmatic gifts, and sometimes a pragmatic gift might be to have a Snapper or an AT HOP card. I think, generally, from my perspective anyway, gift cards are a poor choice of gift—the extremely unromantic choice—so that was one where I’d ask why that particular one was excluded.

The other thing that I just wanted to get a bit of a fine point and clarity on from the member was that we were talking before about the infringements. There was a clause inserted—clause 9—and, basically, that makes it an offence under section 40(1B) of the Fair Trading Act and says that there could be infringement notices applied by regulation. You were just talking about this before in your previous answers about the infringement notices being $1,000, and my understanding of that is that each instance of infringement would then incur that amount of money, or a fine not exceeding $10,000 for an individual, or $30,000 for a body corporate.

With some of the ways that infringement notices are applied, how can we actually see that that is enough of a disincentive, because other people have just this afternoon pointed out some really egregious examples that we’ve heard as this was going through the select committee process. One was where a $1,500 gift voucher was allowed to expire, and, actually, the company that it was provided by was asked to back that up and to actually honour that, but it chose not to honour that gift card. It was of quite a high value, and much higher than previous examples, like the member for Rangitata with his $150 gift voucher—

💬 James Meager: Oh, very generous.

—though it’s still a very significant amount of money. I’m just wondering whether the member thinks that those infringement notices are enough, given that we do have quite big potential fines for people, which do not exceed $10,000, or $30,000 for a body corporate. This is asking around the purpose of that and asking what effect we think that has—whether it’s a big enough effect—for the size of the impact that this has on people’s lives, and also just say a little bit more about the transport and utilities, and we did keep out of that during the select process.

I wish to thank the member for Banks Peninsula for her constructive questions. The first was around why we excluded transport and utility services cards from the definition of a gift card, and, essentially, it goes back to the purpose of the bill. The purpose of the bill is really around gift cards that are purchased normally for the gifting to other individuals, so it was felt that, typically, when you purchase a transport card like an AT HOP card, normally it’s for yourself or an individual in your family, and it’s for your own use. Yes, you can, in fact, gift it on, and many do, but the primary purchase is actually for individual use. That is why we excluded transport and utility gift cards from the definition.

The second area the member asked about was the infringement notices, and, yes, the member is right that there are infringement notices that can be offered and issued to organisations that are found to be in violation of the expiry date law. They are $1,000 for an infringement notice issued, and that gives the authorities the ability to quickly issue notices of an offence. If there are infringement offences under the Fair Trading Act, then there is a process for the Commerce Commission to get involved and for the authorities to issue a fine of up to $10,000 for an individual—which is hefty, but, again, it is “up to”—which will be assessed on the basis of the size and the nature of the offence, and it is $30,000 for a body corporate.

Just going back to the previous question from the member for Whanganui, Carl Bates, who asked the insightful question about the application of this bill to overseas organisations. Of course, this bill only applies to businesses inside New Zealand’s borders—for example, to gift cards sold in New Zealand. That is a clear way for the bill to apply only in New Zealand. If they’re offered to New Zealanders online, then that is part of the legislation, but it does not apply to overseas organisations as a result of this bill.

I move, That debate on this question now close.

The question is, now, that Glen Bennett’s tabled amendment to clause 1 to replace “Gift Card Expiry” with “Gift Card Consumer Protection” stand part.

Motion not agreed to.

The question is that Glen Bennett’s tabled amendment to clause 1 to replace “Gift Card Expiry” with “Consumer Rights for Gift Cards” stand part.

Motion not agreed to.

Point of order, Madam Chair. My understanding was, at your advice, that they can all be taken as one. Or do they all have to be done separately for clause 1?

CHAIRPERSON (Barbara Kuriger): I will just check.

If I may be of assistance, I seek leave to untable my tabled amendments to help everybody.

Leave is sought for that purpose. Is there any objection? There is objection.

Given that leave was sought for that and turned down for that purpose, the advice is that I need to go through each of these.

The question is that Glen Bennett’s tabled amendment to clause 1 to replace “Gift Card Expiry” with “Gift Card Expiry Protection” stand part.

Motion not agreed to.

The question is that Glen Bennett’s tabled amendment to clause 1 to replace “Gift Card Expiry” with “Fair Gift Card Expiry” stand part.

Motion not agreed to.

The question is that Glen Bennett’s tabled amendment to clause 1 to replace “Gift Card Expiry” with “Gift Card Valid Indefinitely” stand part.

Motion not agreed to.

Glen Bennett’s tabled amendment to clause 1 to replace “Gift Card Expiry” with “Gift Card Extended Expiry for Forgetful People” is out of order as not being an objective description of the bill. The question is that Glen Bennett’s—

💬 Hon Member: Glen’s trifling with the Chair.

CHAIRPERSON (Barbara Kuriger): I think we’re all losing objectivity here. The question is that Glen Bennett’s tabled amendment to clause 1 to replace “Gift Card Expiry” with “Extended Gift Card Validity” stand part.

Motion not agreed to.

The question is that Glen Bennett’s tabled amendment to clause 1 to replace “Gift Card Expiry” with “Gift Card Expiry Reform” stand part.

Motion not agreed to.

The question is that Glen Bennett’s tabled amendment to clause 1 to replace “Gift Card Expiry” with “Extended Gift Card Use” stand part.

Motion not agreed to.

Glen Bennett’s tabled amendment to clause 1 to replace “Fair Trading (Gift Card Expiry) Amendment Bill” with “Gift Card Validity Fairness Amendment Bill” is out of order as not being in the proper form of legislation.

The question is that Glen Bennett’s tabled amendment to clause 2 stand part.

The question is that clauses 1 to 10 and Schedules 1 and 2 stand part.

Clauses 1 to 10 and Schedules 1 and 2 agreed to.

Bill to be reported without amendment.

Point of order. Can we party vote that? Sorry, I did say no, but very quietly. You didn’t hear me.

No, the result’s been declared, so it’s a little late. Sorry, you’ll have to speak up a little louder.

Tim van de Molen: You can seek leave.

💬 LAURA TRASK: Can I seek leave to have that amended, please?

CHAIRPERSON (Barbara Kuriger): I can seek leave to take the vote again. Are you seeking leave for that?

💬 LAURA TRASK: Yes.

CHAIRPERSON (Barbara Kuriger): Is there any objection? Yes, there is objection, so the motion stands as it was agreed.

House resumed.

Madam Speaker, the committee has considered the Fair Trading (Gift Card Expiry) Amendment Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.