Fair Trading (Gift Card Expiry) Amendment Bill

on behalf of Dan Bidois (National): I move, That the Fair Trading (Gift Card Expiry) Amendment Bill be now read a second time.

It’s an honour to open our second reading of the Fair Trading (Gift Card Expiry) Amendment Bill. I’d like to acknowledge the whakapapa of this bill. This bill was originally brought in the name of the Hon Melissa Lee and is now being shepherded through by Dan Bidois. I’d like to take the opportunity to congratulate Dan and his wife, Courtney, on the birth of their first child, Noah. Of course, Melissa Lee’s ministerial responsibilities necessitated this transfer but the spirit of the bill remains, and that is to protect consumers and ensure fairness in our retail landscape.

So gift cards and vouchers have become quite a familiar part of our lives. It’s a very convenient way to express our appreciation, celebrate occasions, or simply treat someone. Yet the joy of receiving a gift card can quickly turn bad if it expires before we get a chance to redeem it. So many Kiwis have experienced this firsthand. I know I have, and the statistics are sobering: one in five recipients loses out when they fail to redeem the full value of their gift card within the expiry date.

Consumer New Zealand gave some great examples to the Economic Development, Science and Innovation Committee. One that really stuck in my mind was $1,500 worth of Mobil vouchers. Someone mistakenly thought that they had two years of expiry when, in fact, they only had 12 months. The person contacted Mobil, but they refused to honour the voucher.

Another story was of a woman who received a $180 SkyCity gift card for Christmas in 2022, but due to family plans and illness, plans to use it had to be put on hold. Then when she tried to get an extension from SkyCity, her request was refused, even though, apparently, SkyCity now sells gift cards valid for three years.

I personally have quite an aversion to gift cards, because I fail to redeem them. I’ve pointed out to my loved ones that it’s my preference to never receive them, but I have gifted them on request or as part of a corporate gift. However, in my family, cold hard cash is the preference.

💬 Hon Members: Hear, hear! Cash is king!

Yeah. So prior to this Parliament, 12 submissions were received in the previous select committee, and in this parliamentary term, the Economic Development, Science and Innovation Committee reopened for submissions, and we heard from eight interested groups and individuals, and then we heard from four orally. So I’d like to thank all of the submitters, who provided us with much more information to consider. And those considerations really helped us to improve the bill.

We were very ably assisted in this process by officials from the Ministry of Business, Innovation and Employment. The Office of the Clerk also gave advice on the bill’s legislative quality—and, of course, Parliamentary Counsel Office. All of these officials were invaluable. Thank you so much for all of your support.

So the committee did make some amendments, which we think greatly improve the bill. Firstly, we clarified the definitions of “cards” and “vouchers” and also outlined some of the specific exclusions.

Some of those exclusions include where a card or voucher is provided in substitution for returned goods, “open loop” cards—for example, cards that can be topped up; one, for example, is a Prezzy Card. Another exclusion is where cards are provided as part of a customer loyalty programme. However, for an example, if that programme allows you to collect points and then exchange the points for a card, the card then would be subject to the law.

Another exclusion was where the card or voucher is provided as a fund-raising activity for a charity. Also, where there’s a short-term event like a festival or a concert, those are not applied. We also thought that it might be possible that some devices could also work as a voucher or card—for example, wristbands. In fact, any object could have a chip or a barcode attached to it, which could serve as a token for a voucher redeemable for gifts or services. So this provision prevents any attempt to avoid the expiry rules by providing a different object.

We decided that it should be an infringement offence to contravene the new sections of the Act and that fines not exceeding $10,000 should apply for an individual, or $30,000 for an organisation. Having it as an infringement notice means that each instance of a breach could be considered and its own penalties apply. We think that that would therefore provide a very stiff incentive to comply with the law.

We have allowed for a transition period so that providers can adjust to the rules and not inadvertently get stuck with pre-printed made cards. We expect that most providers who are able would start to comply with the law as soon as possible, and we heard through the submissions process that some are already doing that.

I was particularly interested in the submission from Consumer New Zealand. In 2016, they launched a gift card campaign and then, in 2022, they did a review of 61 gift cards. They found that 14 of them had 12-month expiry dates, one had an 18-month expiry, 19 of them had a two-year expiry, six of them had a three-year expiry, one had a four-year expiry, six of them had five-year expiries, and a whole 14 had no expiry date. So accounting practices in business are very important and gift cards can show up as a liability on businesses. So it was very important that there be opportunities for businesses to be able to work through their processes and transfer those liabilities.

We didn’t have unanimous support for the bill on the committee, but there was a very clear majority support. We think that we’ve made sensible changes to the bill, and allowing that no gift cards should be provided that are not within the three-year expiry will make very useful changes for consumers and more people will be able to fully redeem their vouchers. We will not be stuck in the situation where tens of millions of dollars of gift cards are going begging each year.

This is a win for consumers in New Zealand and this is another way that this Government is getting this country back on track.

The question is that the motion be agreed to.

It’s a pleasure to rise in support of this bill. I’d like to extend, first of all, my congratulations to Melissa Lee, assuming that this will go through. She has been my competitor in Mt Albert, and I have a great deal of warmth towards her. She’s a good friend and I’m pleased that this has come through for her. I’d also like to congratulate Dan Bidois, who has just had a baby—and I didn’t catch the name, but I’ll definitely be finding out—

💬 Tom Rutherford: Noah.

Noah—congratulations to Dan and his wife. That’s really lovely. I’m sure he’s just feeling the full effects of the train that just ran over him!

I now want to turn to the subject of this bill and why the Labour Party is supporting it. I want to contrast it a little bit with the surprise I got—that ACT isn’t supporting a bill like this. It is interesting that that’s where the line is for a party like ACT, because this is, in a way, all about freedom, and it’s about consumer rights. I would have thought there was some common ground there, and I’m disappointed that we aren’t in a unanimous position on a bill like this.

This is a bill about gift cards, where people pay real, hard cash and then they find that they can’t use it anymore. I, along with the majority of people on the Economic Development, Science and Innovation Committee, accept that there are limits and there are balances to be found. People in the select committee agreed that three years was a reasonable time for an expiry, in a bill like this, because people at some point need to get it off their books. That’s a commercial reality. But before that time, we decided, it was not reasonable for people to have these cards expire. Consumer New Zealand had done research in 2022, and they’d found that there were a lot of losses to real-life people, and, right now, those are real-life losses. They are real. When we talk about the cost of living, if in fact somebody has petrol vouchers that they can’t renew, that’s not fair, it’s not reasonable, and it’s a total windfall to somebody to be able to bank money that they have taken and they’ve had the use of and then not actually give the product.

Now I’m going to tell a little story I told my colleagues in the select committee, about an event that happened to me, because I think it’s important to another part of the bill. My ex-husband bought me a balloon voucher, and I was to go on the hot air balloon—

💬 Tom Rutherford: Hot air balloon?

A hot air balloon. It was pretty glamorous and I was pretty excited and it cost quite a lot of money. I never got to use that voucher, because every time I called the balloon company, I was told that there was bad weather and I wouldn’t be able to use it. I had little babies, and I would arrange my life around this damn thing so I would have a babysitter and I would be doing the hard yards. Now, imagine Dan Bidois in that position right now. He’s got the baby, he’s arranged the babysitter, and the balloon doesn’t go up. And, actually, in that scenario, three years is not a very long time. I never got to use the voucher, I never got the experience, and there was no comeback on that company because there were expiries involved. And, actually, it’s not a very long time for a large amount of money like that.

We came to a point where we were talking, in the bill, about penalties and what should apply in this situation. The recommendation was actually quite low penalties, and one of the contributions I made was to say no, the penalties need to be significant here. This is stuff that will be used and will be calculated. If people do not comply with the law as we make it, then they should be up for a decent penalty here. And we’ve got a penalty in which was the original penalty that had been drafted in, and it was $10,000 for a person and $30,000 for a company that exploits this, because people do, unfortunately, exploit these things, and we need to make sure that these fines are real for people.

One of the things that I am looking at, at the moment, actually, is the issue around white- collar fraud. It costs this country so much more, not tenfold, hundredfold more, than benefit fraud—white-collar fraud. So we have to always look at our penalties and our fines and make sure that it does not pay to be duplicitous, to be fraudulent. When something like this comes up, we need to take it seriously.

One of the contributions that we made as the Economic Development, Science and Innovation Committee was to make sure that this is not a wet bus ticket. This will be complied with. People will take it seriously, and they’ll remember the consumer. They’ll remember that it’s hard earned. And when that happened, when I had little children, it was actually quite a big deal to my family because it was worth about $500. And it really did rob a family of something else—it robbed them of an experience. And it hurt us. I hope that the ACT Party remembers that there will be people way more hurt than that, because it will be grocery vouchers, and it will be petrol vouchers, and it will be the grandma who scraped the money together and bought the Prezzy Card. And all those things are now covered, and I’m glad for that.

So I don’t think this is the biggest law in the world, but I think we can see that it’s an important definer of our values. It is remembering ordinary people and the price they pay, and remembering that it’s not about big business.

I will just have a look here and read you what the differing view is, of the ACT Party, on this. They say, “ACT believes that we must leave it to businesses to decide the length of their gift cards or vouchers, to allow them to manage their services or offerings to meet the market demand and their changing circumstances.” I’d ask the people here tonight who are from ACT to think: in that situation, how does that work for the grandma who has paid the money for the present card? How does it work for the person who has the petrol voucher? How is the balance struck in this situation, if this is what we do?

I think the people who are supporting this bill tonight have something to contribute in terms of reminding all the parties in this House that this is not a religion; this is a pragmatic place. The role of Government is sometimes to come in and go, “Nah. Yeah, nah. That’s not going to happen. That’s not actually businesses managing themselves legitimately; that’s people—sometimes shysters—pushing it too far.” So we need to put consumers first.

I am pleased to support this bill because it puts consumers first. It strikes a balance. It talks about three years, which I think is about right. It strikes a balance. We need to set aside some of the ideologies that we have and think—absolutely with common sense—about what will matter to our thriving businesses and what will matter to our people in New Zealand, what will matter to their wellbeing. That’s an important thing for us to remember that we have in common. I would ask that all of us consider that tonight. I am very pleased to be in the majority in the select committee report, and I commend this bill to the House.

Mr Speaker, thank you. I am here to speak on the Fair Trading (Gift Card Expiry) Amendment Bill, acknowledging this is my first contribution to the House after my maiden speech. Congratulations to Minister Lee on the bill—it’s very rare to have your member’s bill be drawn, let alone make it through the full process of the legislation. I commend Economic Development, Science and Innovation that went through this.

💬 Scott Willis: What a good select committee.

What a good select committee—that’s right, absolutely agree. That was actually one of the very first select committees that I was subbed on to, and from the high quality of the discussion and the calibre of the members—particularly my fellow Dunedin-based MP Scott Willis—I have full confidence that the select committee did a fantastic job on this.

I support this bill because this bill is very aligned with Green values, and my values are Green values. One of the Green values that we talk about is fairness. Consumer protection exists because we know that there’s a power differential that different contexts create between different parties. In this case, it’s between companies and consumers. We’ve heard the stats from Consumer New Zealand: there’s over $250 million floating around of gift cards; $10 million a year of value of gift cards is lost—that’s immense—and one in five New Zealanders is stuck with an expired gift card. This is a bill that affects a majority of people—77 percent of New Zealanders regularly receive gift cards. I must confess, like the member Vanessa Weenink, I’m not a fan of gift cards. I think people should really just give cash, or, if someone’s close enough to get a gift card, you just give them an actual present. But that is a personal view; that is not a Green Party view. My personal experience with gift cards is, as I said, I don’t use them.

One of the reasons why this bill is so good is that it’s an example of people fighting for collective change. I really acknowledge the campaign that Consumer New Zealand led which helped kick this thing off—they launched their gift card campaign in 2016. This is an example of why it’s actually important to prioritise collective action over individuals, and why, sometimes, regulation is so important. Because Consumer New Zealand wrote to 14 companies that offered gift cards, and guess how many actually changed! Only one actually ended up changing their policy from, I think, 12 months and then they extended it to two years, and then they ended up reverting back anyway. So, essentially, none actually ended up changing their mind. That shows how important regulation actually is in addressing market failures, because, essentially, when consumers don’t end up being able to spend their gift cards, that’s a massive market failure. And that ends up with surplus being lost from the consumer and with businesses pocketing the difference, and that’s quite unfair.

One of the values that the Green Party abides by is also consensus. Obviously, there’s parts of the bill where we would have loved the bill to go further. And I echo the concerns raised by Consumer New Zealand when they asked to have more robust consumer protections—I think they wanted five years, for example. So let me quote from the submission that they wrote: they said that “In Ireland, for example, traders: cannot insist a gift card or voucher is spent in one transaction; must provide change in the form of cash, electronic transfer or another voucher if the entire value isn’t spent in one transaction; cannot limit the number of vouchers that a person can redeem in one transaction; cannot prevent a consumer from selling or transferring the voucher to another person; must clearly communicate the expiry date on the voucher itself or another durable medium. We urge the Committee to include similar rules in the Bill”. I’m pleased that some of these contributions were picked up in the bill. For example, the expiry date was a change that the wise select committee rightfully made.

Another thing about consensus is that it’s good to get everyone on the same page whenever possible, and we heard from other submitters such as Retail New Zealand and the booksellers association that they supported the broad aims of the bill. So, in fact, when members in ACT are concerned about business not being aligned, well, when Retail New Zealand and the booksellers association, in consultation with their members, have said that they would support the aims of the bill, then it’s something to perhaps think about.

Another thing to consider is that no legislation is ever perfect but if bills kind of take us forward, sometimes you don’t get everything you want. But the bills do have a role in kind of playing as consensus dealmakers in helping constructive legislation like this progress through the House. So, with that in mind, I want to thank all the submitters who gave their time to the bill. I want to thank the select committee who considered this bill, and all members of the House for their contributions. Kia ora.

Thank you, Mr Speaker, for the opportunity. I’m taking this call on behalf of the ACT Party to oppose the Fair Trading (Gift Card Expiry) Amendment Bill. As this is the second reading, I would like to reflect on the select committee process. In the Economic Development, Science and Innovation Committee, we received submissions and we also heard from submitters, so I want to thank all those submitters. I want also to acknowledge those submitters who appeared before the select committee to speak to their submission. I want to also thank the team of the clerk of the committee, I want to thank all the advisers, Parliamentary Counsel Office, everyone who has been involved in bringing this bill to the shape that it is. I also want to acknowledge all the members on the committee and especially the member in charge of this bill. I want to also congratulate Dan Bidois and his wife for their newborn, and we are really looking forward to seeing Dan back after he has enjoyed his parental leave.

In his absence, this bill is going through the second reading, so I’m sure he will be watching this from home. And what I want to say to you, Dan, is that we do not support this bill, but we can see the intention behind this bill. The intention behind this bill is to see that the customers are able to—or consumers, those who are presented with a gift card—are able to redeem that gift card and so that they get enough time, and that is the time of three years. Until now, we know that businesses don’t have a fixed time, businesses decide what the length of the time of expiry of a gift card should be.

In the select committee, we actually made quite a few changes, and there were discussions around quite a few things. The main discussion was around what is a gift card and what should be included in the definition of a “gift card”. We talked about cards and vouchers which are supplied in substitution for return goods. We talked about Prezzy Cards—we wanted to clarify if they are gift cards or not, and that was clarified in the select committee. We also wanted to talk about gift cards supplied through customer loyalty programmes, and here we were talking about, like, Flybuys is a loyalty program where you get a card, but then using those points you can buy a gift card—whether it would apply to that or not. So we just wanted to make those clarifications. We also wanted to clarify regarding any cards or vouchers which are given for a time-limited event. We also discussed cards that are used for transport and utilities, if they should be included or not, second-hand consumer sales of gift cards, and also how to deal with cards which are sold for raising funds in charitable function.

So going through all these things and the way people pass on gift cards or gift vouchers in so many different formats for so many different reasons, it just shows that it is a complicated area. And our reason the ACT Party is opposing this bill is because we really believe that it is something that the businesses should decide because it is about their liability, it is about their financial sustainability. No matter what length of time is given, there will always be some consumers who will not be able to redeem that gift card. There is no guarantee that if there is a longer expiry date, all of the consumers—those who receive gift cards—will be able to redeem that gift card. And in the select committee process, what was really interesting was that, yes, we reported back this bill, saying that the length of expiry should be three years, and, yes, some submitters thought it should be three years; some submitters thought it should be five years. One of the submitters who has been talked about—Consumer New Zealand—in their submission, they said that “We urge the Committee to consider extending the three-year minimum to five years to ensure consumers don’t miss out on what is rightfully theirs.” So it wasn’t like every submitter thought that having this fixed time line of three years is going to work for everyone. So there were views where people thought there should be no expiry date. There were views where people thought, actually, there should be a longer expiry date. So there was not one point that came through all of the submitters.

Now, we also heard about Retail New Zealand’s submission. I would like to highlight what Retail New Zealand said. So these submitters—yes, I want to acknowledge that they supported the intent of this bill, but there was something important in these submissions that is important for me to highlight. Retail New Zealand’s submission said this—this is in their submission, and I’m reading out from their submission—“Retail NZ surveyed our membership in the preparation of this submission and found that over half of members that sell gift cards have an expiry date of one year from the initial sale date. Retailers report that most gift cards are redeemed within six months of being issued.”—“Most”, it says. Most retailers have said that most gift cards are redeemed within the six months of being issued. It’s a very important point which should be noted, and was noted by the ACT Party. It also says, “While gift cards have benefits, extended periods of time between when a card is issued and when it is redeemed can create complexity for retailers. Over half of retailers that sell gift cards report difficulties dealing with the treatment of gift cards in accounting. This is particularly an issue for small and medium sized businesses.”

So when we are putting through any legislation, we have to take into consideration all kinds of businesses, small and big businesses. Here, this is what we heard from Retail New Zealand. This is what Retail New Zealand’s submission says, very clearly, that, yes, there are complexities they have to deal with if the expiry date is long. Again, the other point they made was this: that there should be a transition time of 12 months so that the retailers get enough time to transition to the expiry date which will be set by this bill—that is, of three years. So, obviously, it’s not something that can happen overnight, so we are creating this additional burden on businesses and they need time to adjust to this new expiry date. This submitter said that it should be 12 months. It’s not just one submitter that said that there should be time available for businesses to transition to this expiry date setting if this bill goes through.

The other thing we heard from—this is like not just the small businesses but some big companies also said that they want a transition time and some suggested 12 months; some suggested 18 months. So this is really important for us to note: that it is something that we are actually adding to what businesses are already doing, and this is not going to add to their efficiency or their productivity. As far as consumers are concerned, as long as the consumer can clearly see what the expiry date is; as long as the consumer is clearly told or conveyed what the expiry date is of the gift card that is purchased, then it is up to the consumer to use that gift card within that expiry date.

Here, to imply that somehow businesses are not doing the right thing by giving an expiry date of six months or 12 months, I reject that notion. That is not the case, because businesses know how they operate; businesses know what their marketing strategy should be. Gift cards are used as a tool in their marketing strategy. They want to see that people—those who take gift cards—when they come back, they might be buying something that will actually cost more than the value of the gift card. Also, they might expect these customers to come back and become their regular customers because they have been given a gift card of their store or whatever the service they provide.

So, overall, gift cards are part of businesses’ marketing strategy. We should leave it to businesses how they use this gift card as a tool in their marketing strategy. That is why the ACT Party is not supporting this bill. Thank you, Mr Speaker.

This debate is interrupted and is set down for resumption next sitting day. The House stands adjourned until 2 p.m. tomorrow. A wonderful learning day. Good night.

Debate interrupted.

The House adjourned at 10.01 p.m.