New rules in Alberta will eliminate expiry dates and inactivity fees on gift cards starting November 1, ensuring consumers receive full value for gift cards.

“Gift cards have become incredibly popular in our province and we want to make sure Albertans get what they pay for,” said Heather Klimchuk, Minister of Service Alberta. “This new regulation will ensure that if a consumer buys a $50 gift card, it will be worth $50 no matter when it is redeemed.”

The regulation, part of the province’s Fair Trading Act, will:

• not allow expiry dates on gift cards, gift certificates, and vouchers that have been purchased and have monetary value;
• eliminate inactivity fees, also called dormancy fees, that reduce the value of gift cards the longer they go unredeemed;
• prevent businesses from not honouring gift cards for purchases that are more or less than the value of a gift card; and
• require merchants to fully disclose any restrictions on use of a gift card on both the actual card and its packaging.

The new regulation will apply to valid gift cards purchased before, on or after November 1, 2008.

“In developing these new rules for gift cards, we met with business and consumer groups, and most agree these protections are important for consumers,” said Klimchuk. “In fact, the majority of retailers do not currently have expiry dates or inactivity fees on their gift cards.”

Businesses will be allowed to charge a one-time fee on top of the value of the gift card at the time of purchase, but must fully disclose and clearly explain that fee to consumers. Violations of the new regulation could result in fines as much as $100,000 or two years in jail. An awareness campaign to advise merchants and consumers about the rules is now under way.

"The needs of the customer are always top of mind for retailers, and will always take precedence. These new rules will protect the interests of customers, while still allowing retailers to continue to grow this new and vibrant part of their business," said Peter Pilarski, Director of Government Relations and Membership Services for the Retail Council of Canada (Alberta). “We certainly appreciate the fact that the Province consulted widely on this regulation and took the time to understand the needs of retailers. Retail sales and domestic demand help to keep the Alberta economy strong and we wanted to make sure that any new rules could be implemented smoothly and efficiently."

Consumers considering buying a gift card or gift certificate should check with the merchant to determine if any terms or conditions apply. An estimated $1.2 billion in gift cards are sold annually in Alberta, and each year up to $180 million is lost through non-redemption or expiry of the cards. For more information about the gift card regulation, visit www.servicealberta.ca.

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