Coming up to Christmas, gift vouchers are an excellent way to get revenue pumping into your business and to raise the goodwill in your brand.
But you can really get yourself in a tangle if your gift vouchers don’t comply with the law.
Ok – no need to panic just yet, but did you know that gift vouchers are considered ‘non-cash payments’ that ASIC regulates and that if your gift vouchers don’t do 7 specific things, you might need a financial services licence to sell them? Yikes!
Let’s look at those 7 things that your business and your gift vouchers need to do so that you can be exempt from needing a special licence and so that you can have the terms of your gift vouchers sorted well before the Christmas shopping season.
- Your gift vouchers need to be able to store monetary value (pretty obvious).
- The monetary value can’t be redeemable for cash (it can’t work like a debit card – your customers can’t use it to withdraw cash). That said, if there is a very small amount left on the card, it might be ok to give a customer the remaining balance in cash if it isn’t convenient for the customer to use that last little amount in your store.
- Your gift voucher can’t be reloadable. The gift voucher can’t be topped up so that the value is increased after it is initially purchased.
- It’s ok for the gift voucher to be able to be used on multiple occasions (ie chipping away at the balance by more than one purchase).
- Gift vouchers must be promoted or marketed only as a gift product.
- If there is an expiry date, it needs to be very clear to the customer when the gift voucher will expire.
- The gift voucher can’t be part of another financial product.
Separately from ASIC’s requirements, the law also says that all the terms and conditions of the gift voucher must be disclosed to your customers upfront.
If you are after some more suggestions for how to sell and process gift vouchers, the business.gov.au website has a great page filled with tips and traps here. For example, there are some handy tips on how to record gift voucher sales in your bookkeeping records.
Bring on the Christmas rush!