Full redemption: Gift Checks Act of 2017
The rule reiterates the prohibited acts as stated in the law but clarifies that the gift checks may be presented as many times as possible until fully exhausted
Published in Daily Tribune on January 15, 2021
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The first ever gift card was introduced by Neiman Marcus Group Inc., an American chain of luxury department stores.
Blockbuster video rentals picked up on the idea and ran with it on a large scale. Since then, businesses have adopted this marketing scheme in their operations.
In fact, in the Philippines, it is estimated that the gift card market will increase from US$ 467.1 million in 2019 to US$ 764.2 million by 2024. These figures appear to be detached from the common consumer but it is undeniable that we are the primary driving force of the gift card market. With the money that retailers get from customers using these checks, the least we can do is ensure that we get our money’s worth for these cards.
After all, while these cards are not legal tender, they are as good as cash for establishments that peddle them.
Republic Act 10962, otherwise known as the Gift Check Act of 2017 and its respective implementing rules and regulation (IRR), aims to ensure that the recipient of a gift card or certificate is able to fully utilize or redeem its value.
Section 4(a) of the law defines a gift check as any instrument issued to any person, natural or juridical, for monetary consideration, honored upon presentation at a single merchant or an affiliate thereof as payment for consumer goods or services.
A gift voucher, on the other hand, while pretty much the same, is one that may be exchanged for pre-identified goods or services. The Gift Check Act, however, does not cover gift vouchers and gift checks that are issued under a loyalty, rewards, or promotional program as determined by the Department of Trade and Industry (DTI).
Section 5 of the law prohibits: 1) Issuing gift checks with expiration dates; 2) imposing an expiry date on the stored value, credit or balance of the gift check; or 3) refusing to honor the unused value, credit, or balance stored in the instrument.
The prohibitions are easy to understand: A gift check, once purchased, should be valid in perpetuity.
When a gift card is used for a purchase and a balance is left from the transaction, the retailer is required to honor the balance, if any, which should likewise be valid until used.
Section 1, Rule III of the law’s IRR emphasizes the following: 1) Gift checks are honored by the issuer and its affiliates upon presentment; 2) gift checks shall not have an expiry date either on the stored value, credit or balance of the gift check; and 3) gift checks shall be honored for its full value and there shall be no limit on the number of presentments until utilization of the full value.
The rule reiterates the prohibited acts as stated in the law but clarifies that the gift checks may be presented as many times as possible until fully exhausted.
The IRR (Rule IV) imposes the duty on issuers to provide mechanisms for the consumer to monitor the unused value, credit or balance stored in the gift check.
Should the business establishment close, holders of the gift check may surrender the gift check for refund or use at the option of the consumer at least two months before the date of closure.
A gift check may be dishonored only when the gift check is lost [Section 7(a)] or when the gift check is defaced or mutilated rendering it impossible for the issuer to determine its security and authenticity features [Section 7(b)].
Entities found in violation of this law may be fined by DTI P500,000 to P1,000,000 and repeat-offenders may have their authority to issue gift checks suspended or canceled (Section 11).
The Gift Check Act does not cover gift vouchers and gift checks that are issued under a loyalty, rewards, or promotional program.
Just this Christmas, I used a P200 scrip gift certificate at my favorite coffee place to pay for a purchase of only P150. I was advised that I would either have to forfeit the balance of the gift check or buy another item to max its value in one go.
I verified this with their customer service who confirmed this policy. At that time, I was just there to enjoy a cup of joe and, while knowing the policy was legally flawed, I simply let it go. What’s P50 anyway, right? But just imagine how many P50s have been forfeited because of this policy. They could very well add up to $764.2 million.
