Law Summary
Declaration of Policies
- The State aims to protect consumer interests and promote general welfare.
- It establishes standards of conduct for business and industry.
- It promotes fair, honest, and equitable relations in consumer transactions.
- Protects consumers against deceptive, unfair, and unconscionable sales practices.
- Recognizes gift checks as value held in trust by issuers for consumers.
- Ensures consumers are not unfairly deprived of their money's value.
Scope
- The Act applies to all issuances of gift checks as defined in the law.
Definition of Terms
- Gift Check (also Gift Certificate or Gift Card): An instrument issued for monetary consideration to be used at a single merchant or affiliated merchants for payment of goods or services; may be paper, card, code, or other device; valid until issuer ceases business.
- Coupon or Voucher: Instrument entitling the holder to a discount or exchange for specific goods or services; may be issued for consideration or otherwise.
- Issuer: Entity (natural or juridical) that issues the instrument holding value for exchange of goods or services.
Prohibitions
- It is unlawful to:
- Issue gift checks with expiry dates.
- Impose expiry dates on the stored value or balance of gift checks.
- Refuse to honor any unused value or balance in the gift check.
Exclusions
- Gift checks issued under loyalty, rewards, or promotional programs as determined by the Department of Trade and Industry (DTI) are excluded.
- Coupons or vouchers as defined are likewise excluded from the Act.
When Issuers and Merchants May Refuse to Honor Gift Checks
- Refusal possible if:
- The gift check is lost due to reasons not caused by the issuer.
- The gift check is mutilated or defaced not due to issuer fault, hindering authentication.
- Issuers may set reasonable rules for changing, upgrading, or updating gift checks;
- Subject to DTI approval,
- Must not impose additional cost to consumers,
- Must not violate any provision of the Act.
Applicability to Promotional Programs and Other Policies
- Promotional sales, loyalty programs, warranties, return policies for cash purchases, and discounts for senior citizens and persons with disabilities apply equally to purchases made with gift checks.
Transitory Provision
- Gift checks issued before the Act take effect are covered by the Act.
- Holders of unused, unexpired gift checks have the right to revalidation and replacement at no additional cost.
Consumer Complaints
- Violations of this Act shall be reported and handled according to the Consumer Act of the Philippines, specifically Chapter III, Title V of Republic Act No. 7394.
Penalties
- Violators must return unused gift check balances within 90 days of DTI's violation declaration.
- Fines range from Php 500,000 to Php 1,000,000.
- Second offense: Additionally, gift check issuance suspended for 3 months.
- Third offense: Gift check issuance canceled, along with fines.
Implementing Agency and Rules
- DTI has sole jurisdiction for implementing the Act.
- DTI must promulgate implementing rules within 90 days of the Act’s effectivity after consulting stakeholders.
Repealing Clause
- All laws, orders, or regulations inconsistent with this Act are repealed or amended accordingly.
Separability Clause
- If any provision is declared invalid or unconstitutional, the remainder of the Act remains unaffected.
Effectivity
- The Act takes effect 15 days after publication in at least two newspapers of general circulation.