Business - Frequently Asked Questions

What changes do we have to make in our gift card/gift certificate program because of the new regulations?

All expiry dates will be prohibited on all cards/certificates issued or accepted on  or after Feb. 1,2010, except cards issued for charitable and promotional purposes

Gift cards for specific goods and services issued before February 1, 2010, will still be allowed to expire on their scheduled date

Required disclosure on all cards:
    * Expiry dates and fees (if applicable)
    * Refund policy (if applicable)
    * Contact details for consumers to check balance of the card

No fees (e.g. service or dormancy fees) on all gift cards/certificates except for customization and replacement fees

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Why remove expiry dates?

Consumers have paid the full value for a gift card or certificate and reasonably expect to redeem that full value. 

Businesses that choose to issue gift cards benefit in other ways, such as:

• the use of the money between the time of gift card purchase and redemption
• advertising and promotion
• margin on the goods and services purchased by the end user

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Do these changes apply to all types of cards?

Yes, changes apply to all cards and gift certificates except, charity and promotional cards, pre-paid telecom cards and prepaid credit card branded cards such as Visa, Mastercard, American Express or Diners Club.

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What are cards issued for charitable and promotional purposes? Why are these exempted from the regulations?

Cards issued for charitable purposes are those cards that businesses give to charity to help raise funds, such as a $20 gift card donated by a store for use in a fund-raising auction.  These are exempted because they fall under different tax considerations.

Promotional cards, on the other hand, are given for free or at less than full value to consumers for marketing purposes. 

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Why were we not given more time to adjust to the new regulation?

Most jurisdictions in Canada and many in the retail industry have already eliminated expiry dates on their gift cards. Two months was considered an adjustment period that balanced industry needs and consumer protection.

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Why can’t we charge service or dormancy fees?

Service or dormancy fees diminish the value of a card through time and acts as an effective expiry date.  For example, a $25 card that is subject to fees of $2.50 per month will expire in less than a year once fees are charged.

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Since cards are no longer allowed to have expiry dates, how do we charge customers the difference in the prices of specific goods and services (such as a massage) after a certain period of time?

If no dollar value is indicated on the card, the business must either honour the card for the good or service or clearly disclose to the consumer that if the card is not used within a certain time period, additional charges may apply.

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Why do these regulations seem stricter than those in other provinces?

Some provisions are stricter than those in other provinces.  Other provisions are the same as most of the other provinces. The overriding goal is to make sure consumers receive the full value of their gift cards or gift certificates through time.

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What are the penalties for not following these regulations?

Under the Consumer Protection Act, violations can be subject to a penalty for an individual of not more than $2,000 or to imprisonment for a term of not more than  one year, or both.  For a corporation, a penalty of not more than $25,000 may be charged. Businesses will be given fair warning to comply with the regulations.

We anticipate that in most cases, it will be the consumers themselves who will hold businesses accountable to these regulations.

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What if I have different return policies for different items?

The intent of the Regulations is to ensure that there is full disclosure on any restrictions on the card for the end user.  A statement that the store’s usual return policies apply to purchases made with the gift card is acceptable, if such  is the case.

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What if I produce a card redeemable at multiple stores with different return policies?

Where different policies apply (as in the case of different stores), it is acceptable to direct the cardholder to a telephone number or a website where the customer can find the applicable return policy.

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My business does not have a return policy. Do I need to put something on the card to show this?

If the provision regarding return policies is not applicable to you, then you do not need to put a policy on your card.

Sample Information for Gift Card/Certificates:

AL Pizzeria
120 Main St., Anytown, NS 555-1212
The bearer of this card is entitled to $20 at AL Pizzeria

Bella’s Gifts
121 Main St., Anytown, NS 555-2323
This gift certificate may be redeemed for $30 worth of merchandise
Purchases made with this certificate are Final Sale

Sample Information for Promotional Cards:

Enjoy one free pizza at AL’s
AL Pizzeria
120 Main St., Anytown, NS 555-1212
Valid until January 1, 2011

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