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posted 1 year ago
Gift cards have become a popular option for offering gifts and rewards in the Business-to-Consumers (B2C) domain. As a business offering gift cards to UK consumers, it is crucial to understand the UK legal rules surrounding gift cards to protect your customers and your business. In this article, we will outline the key legal rules that gift card providers should be aware of and explain how you can comply with them.
1. Clear Terms and Conditions (T&Cs)
When consumers purchase a gift card, they enter into a contractual agreement with the business that issues or offers the gift cards, and such arrangement is governed by UK contract law. As with any agreement, specific ‘terms and conditions (T&Cs)’ are associated with this purchase.
In the UK, these T&Cs constitute legally binding contracts governing the purchase, distribution, and/or facilitation of gift cards. These contracts are usually established between the purchaser of the gift voucher and the issuer, but the contractual benefits are effectively assigned to the recipient of the gift card as applicable.
Having clear and easily accessible T&Cs is crucial in this context. When dealing with consumers, any ambiguity or omissions in the T&Cs could lead to difficulties in enforcing the terms, especially during disputes. Everything hinges on what was agreed upon at the time of purchase, so ensuring clarity in the T&Cs is essential for a smooth customer experience.
To help make your T&Cs easily understandable and enforceable, here are some points you must consider:
Don’t forget that you must communicate the gift card’s T&Cs before and after the point of purchase. As with any other online purchase, consumers must also agree to these T&Cs when completing their purchase, e.g., by checking a box or clicking a button during the online purchase process, explicitly indicating their acceptance of the T&Cs.
2. Expiry Dates
As stated above, a common condition that applies to gift cards is an expiry date. Under UK law, including an expiry term as a contractual condition is permissible. Retailers often set a specific period within which the gift card must be used, while others may offer more flexible options, such as “no expiry” vouchers or longer redemption periods.
Including expiry dates can be beneficial for retailers as it prevents the build-up of undeclared liabilities and ensures the timely provision of goods and services. However, for such terms to be enforceable, they must be clearly described in the sale particulars. Compliance can be ensured by indicating the expiry date in the T&Cs, on the gift card, the trader’s website, and store leaflets or posters, if and as applicable. Additionally, the expiration date should be reasonable, prominently visible, and not hidden in any way. If the gift card has no expiry date, this should be explicitly stated.
If a gift voucher does not have an expiry date specified, and you refuse to accept it as payment, consumers may have a potential claim for breach of contract, depending on the circumstances. On the other hand, if a gift voucher has already expired, you are not legally obliged to accept it. The responsibility for using the gift voucher within the specified time limit lies with the recipient. However, you can accept expired gift vouchers as a goodwill gesture, even though you are not obligated to do so.
3. 14-day to cancel online purchases
When you sell gift cards online to consumers, they have a 14-day period to change their mind and cancel the contract, provided the gift card has not been used. This starts the day after the consumer, or someone selected by the consumer, receives the gift card. Such rules apply to contracts made between a trader (seller) and a consumer (buyer) where the contract is made at a distance, such as online gift card purchases.
If a consumer wishes to cancel the gift card contract, they must inform you within the specified time period and, if the gift card is physical, return it to you. In the case of digital gift cards, you must provide a means to deactivate them. Once you receive the cancellation request and, if applicable, the physical gift card, you are required to promptly refund the consumer within 14 days. The refund should encompass the full purchase price of the gift card, as well as any outbound delivery charges the consumer initially paid. It is important to note that unless you have explicitly agreed to cover the return shipping costs or failed to inform the consumer about their responsibility to bear these costs, the consumer is responsible for the return shipping expenses.
Furthermore, ensure your gift card’s T&Cs clearly state the cooling-off period and your policies. Inform consumers about their right to cancel, the process for exercising this right, and the return and refund policy for cancelled gift cards, including details on who covers return costs. Mention any exceptions to the cooling-off period, like personalised gift cards. Provide contact details for customer support regarding cancellations, refunds, or any other gift card inquiries.
How can Logan & Partners help?
Ensuring compliance with UK consumer law is of utmost importance when providing products or services to UK consumers, regardless of your company’s physical location. Even if your business operates outside the UK, you must adhere to the relevant consumer protection regulations when dealing with UK customers. If you have any questions or need legal assistance regarding your online gift card terms and conditions, and how to implement them, please contact Isadora Werneck for a free consultation.
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