'You probably have no rights': Law expert's Christmas gift card warning

Gift cards seem like a convenient Christmas present when you're shoulder-to-shoulder with hundreds of other tired shoppers during the silly season.

But are you really spending your money wisely?

According to Melbourne University Professor of Law Jeannie Paterson, it is far more economic to simply give a loved one a card with cash.

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Paterson said she has bought gift cards in the past but likely won't ever do it again.

"I would say just give the person cash or put money in their bank account, because gift cards actually aren't as good as cash or money in their bank account because of the restrictions," Paterson told nine.com.au.

The laws around gift cards in Australia are enforced by the Australian Competition and Consumer Commission (ACCC).

Since 2019, gift cards must be valid for at least three years from the date of purchase.

But there are some exceptions to the ACCC rule.

This includes cards that can be re-loaded, second-hand gift cards or vouchers with a discount offer.

The cost of gift cards also can't include "post-supply" fees such as activation, inactivity or balance inquiry fees.

Businesses can, however, charge fees for reissuing cards that have been lost, stolen or damaged.

Some retailers choose to have unlimited expiry, including Woolworths.

These laws protecting consumers are also in place to protect the businesses, Paterson said.

"There has to be a provision for the fact there's this financial liability to businesses," she explained.

"And the deal that's been struck in the economy is that they only need to hold that liability for three years."

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But Paterson said she doesn't believe this is a fair deal for consumers.

"I personally think it should be a bit longer," Paterson added.

"You'd be much better off having that money in the bank."

Consumer comparison website Finder estimated in 2024 that Australians are sitting on around $1.4 billion in unused gift cards.

They may be expired, lost or just forgotten about.

"If you lose it, you probably have no rights. People perhaps don't realise that," Paterson said.

"People receive gift cards and they don't spend them or they don't spend them immediately or they lose them."

Retailers in particular are weathering tough trading conditions in Australia.

Plenty of chain stores have permanently closed or plan to soon – including the likes of Famous Footwear, Millers, Rivers and Katies.

If you are holding onto a gift card and the retailer folds, you technically lose that money.

Under ACCC law, you might become an "unsecured creditor" but the odds of getting your gift card back in cash are unlikely.

"It's just part of a bundle of debts that might be owed and never paid off," Paterson said.

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