Gift card liability rules

In a retail deal, an unredeemed gift card is a promise to supply goods or services in exchange for money already paid. Consumer Protection BC says British Columbia’s law, which uses the term prepaid purchase card, describes such cards as issued or sold in exchange for the future supply of goods or services. Consumer protection law in Ontario and British Columbia limits how far a business can restrict that promise. This entry covers those two provinces only; check the rules where you are.

Ontario

Ontario Regulation 17/05 says no supplier shall enter into a gift card agreement that has an expiry date, and an agreement with one is effective as if it had none. It also limits fees, with listed exceptions such as replacing a lost or stolen card. Section 25.1 excludes some cards, including cards for a charitable purpose, cards that cover only one specific good or service and cards issued by a financial institution.

British Columbia

Consumer Protection BC says gift cards for a specific dollar amount are not allowed to expire. It lists exceptions, including cards issued for a specific good or service, cards sold at a discount and cards sold for charitable purposes. It also says store credit given for a returned non-refundable item is not a gift card, and prepaid cards issued by a financial institution are not covered by BC’s gift card laws.

What to ask

• How many cards are outstanding, and which of them fall in an excluded type
• How the purchase agreement allocates them, as in what happens to gift cards when a store sells
• Whether a holdback is meant to cover them