Announcement posted by RedBalloon 30 Nov 2017
SYDNEY: The NSW Government yesterday announced from March 31 2018 all retailers in the state must honour gift cards for three years. RedBalloon has opted to lead the market by implementing the change on all vouchers across Australia and New Zealand, effective immediately and backdated to 18 October this year.
The legislation limits the expiry extension to NSW customers only, however RedBalloon has taken the step of rolling out the change to customers nationally, as well as to their New Zealand operations, from today.
The business has also backdated the change to the date the bill was passed through NSW Parliament, meaning any voucher purchased on or after 18 October 2017 will carry the full three year expiry; a tripling of the current 12 month industry standard.
RedBalloon founder and small business advocate Naomi Simson is delighted about the change as it means incredible value for both customers and their 2000-plus small business partners.
“We had believed we were unable to do this previously due to taxation requirements from the Tax Office, who do not collect their portion until after a voucher is either used or expires,” Ms Simson explained.
“But the NSW State Government has paved the way with this change, and we are delighted to offer the additional two years.
"We understand that the large national retailers have indicated they will make this change by 31 March 2018 when the law is enacted. However most use the same retail gift card platform, so there is no material cost for compliance. For smaller businesses who do not have access to these systems, the compliance is material.
“We’re making this change because we think it offers great value to our customers. We’re doing it now because we didn’t want to serve hundreds of thousands of customers between now and the enactment, given we understand the inevitability of the law change.
“We want people to go on their experiences. The toughest conversations we have with customers are about voucher expiry - this now goes away.
“We are delighted to be able to do it for every voucher we deliver, but equally concerned about the impact on small suppliers, which is why we’re not asking our suppliers to hold their prices or types of experiences for three years.
“We are protecting our suppliers by managing the financial burden of carrying customer credit for an additional 24 months, so that our customers have a longer time frame in which to use their vouchers.
“It’s something we’re proud and happy to do on behalf of our business partners, as well as delivering great value to our customers.”
Ms Simson spoke earlier this week about the sheer volume of compliance and detail small business operators are required to stay on top of, while also trying to run a business.
“Running a business is hard. Running a small business is really hard,” Ms Simson said.
“Let me be frank, this sort of legislative change has enormous impact on how we do business - from the very website we operate, to the thousands of small businesses we work with. Every retailer is currently reviewing the NSW legislation.
“And to roll this out at our busiest time of year, with Christmas on the horizon, was a huge risk for the business - our tech team and analysts have produced miracles in this short time frame.
“We wanted to show leadership and authority to our retail peers and make the change early and across all markets; not limited to NSW residents.”
RedBalloon estimate the cost to the business for implementing pre-Christmas at close to half a million dollars. This accounts for development work, additional headcount, and the opportunity costs associated with prioritising this change over other projects in the wider business plan.
This is why Ms Simson has real and valid concern that the new legislation will pose many problems, not just financial, for countless small business retailers across the country.
“RedBalloon is in the fortunate position of being able to make these changes and wear the financial and resource costs required to do so - but that is the not the case for all.
“As a small business advocate I am incredibly nervous for the impact this will have on family and small businesses across the country, and I really hope the regulating authorities responsible have thought through the ramifications of the change and how they can support business owners through the transition.”
The extended expiry will also apply to RedBalloon retail gift cards (found in major retailers like Woolworths, Coles, Myer and Target), where any customer who can show proof of purchase on after October 18 2017 able to access the full three years to redeem that value.
Available for interview: RedBalloon Founder Naomi Simson
More information: Big Red Group Corporate Affairs Manager - Lauren Gleeson | firstname.lastname@example.org | 0404 136 765
We’ve been a trusted leader in the online retail space since 2001, after pioneering experiential gifting in Australia. We connect customers with almost 4000 unique and amazing experiences, sourced from more than 2000 business partners across Australia and New Zealand. RedBalloon was an experiment to test whether a company could be successful simply by listening to its people and customers and delivering a great experience to both, and we remain committed to this 16 years on. RedBalloon is the marketing partner of thousands of small businesses - we not only deliver customers but also provide business tools, education and digital marketing expertise to those listed with RedBalloon. When business partners are successful then so is RedBalloon. We're an Australian small business, supporting other small businesses and together we are all stronger.