By Franchette M Acosta, senior partner, V&A Law
On December 19, 2017, the Gift Check Act of 2017 (Republic Act No. 10962) was signed into law. The preamble of the law reiterates government policy of protecting and promoting consumer welfare and establishing standards of conduct of business. In particular, the law protects the holder of a gift check/certificate/card or a coupon/voucher and imposes on the issuer stricter standards of law. A gift check/certificate/card is any instrument issued to any person in exchange for monetary consideration which is honored upon presentation to a merchant. The instrument may be in paper, card, code or other device and will remain valid until the cessation of the business of the issuer. A coupon or a voucher is any instrument that entitles the holder to a discount or to exchange the same for an identified good or service.
The law prohibits the following acts:
Issuing a gift check that bears and expiry date;
Imposing an expiry date on the stored value, credit or balance of the gift check; or
Refusing to honor the unused value, credit or balance stored in the instrument.
In case of violation of the law, the issuer will be required to return the unused balance of the gift check. In addition, the issuer will be subject to a fine PhP 500,000 to PhP 1,000,000.00. In addition to the imposition of a fine, in case of a second offense, the issuance of a gift check will be suspended for 3 months. The third offense will be penalized with cancellation of the issuance of gift check by the issuer.
This article is published for information purposes only, and should not be considered as legal advice.