The Chamber of Commerce referred to in the details supplied by the Deputy issues a gift card that expires after 12 months, though this can be extended for a further ninety days on payment of €9.95 by the gift card holder. The costs of operating the scheme in partnership with a UK-based gift card provider are met from monies on gift cards not fully redeemed during the 12-month expiry period. The Chamber’s concern is that the proposed five-year term for gift vouchers will require it to change the business and revenue model on which its scheme is based and that the alternative revenue models open to it will reduce the attractiveness of the scheme to businesses and consumers and have a negative impact on the local economy.
While I am aware of the concerns expressed by the Chamber concerned and am a strong supporter of the shop local gift card schemes that operate in a number of towns throughout the country, I do not propose to make any changes to the provision for a five-year minimum term for gift vouchers. In its submission to the Department’s consultation on gift voucher fees and expiry dates, Chambers Ireland which represents 43 affiliated Chambers, including the Chamber referred to in the details supplied by the Deputy, indicated that five years was a reasonable minimum term for gift vouchers. Though some eighteen Chambers currently operate local gift card schemes, the Chamber in question is the only Chamber to have expressed concern about the expiry date provision. There was broad support for the provision from all parties, including from the Deputy, during the recent debates on the Consumer Protection (Gift Vouchers) Bill in Dáil Éireann and Seanad Éireann. Other considerations apart, it would be anomalous, confusing and unfair to have a different mandatory minimum term apply to gift vouchers supplied under local gift voucher schemes than to the vouchers issued by the individual retailers and service providers who participate in such schemes.
While it is not for me to advise the Chamber in question on the type of gift card scheme it should operate, I am aware that a number of other Chambers issue local gift vouchers in partnership with a provider of electronic money gift vouchers. These Chambers clearly take the view that this type of voucher offers a viable business and revenue model for their schemes. Gift cards issued by an electronic money provider benefit also from the requirements of the Electronic Money Directive on the safeguarding of the funds held in electronic money instruments.
While the Consumer Protection (Gift Vouchers) Bill provides that gift vouchers must be valid for a term of at least five years, it does not regulate the point at which, and the conditions under which, businesses can treat unredeemed balances on gift vouchers as revenues and not as liabilities. I understand that the guidance prepared by a number of accountancy firms on International Financial Reporting Standards (IFRS 15 Revenue from Contracts with Customers) suggests that where businesses have historical data on patterns of gift voucher redemption, they might not necessarily have to wait until a mandatory five-year or other expiry period has fully elapsed before they can claim unredeemed vouchers as revenue. This is a matter however for the issuers of gift cards and their accountants and is not one on which I can provide guidance.