Immortality of gift checks

Jefferson L. Gomez

During the last Holiday Season, it was not unusual for companies, firms and even individuals to give gift checks, gift certificates, or gift cards to their clients, employees, friends and loved ones. This practice is now widely accepted in lieu of giving an actual gift item. Because they are convenient and handy, gift checks have developed to be a source of excitement and delight with their inclusion as prizes in events such as parties, social gatherings, and the like. Thus, more establishments have joined the bandwagon of issuing and offering gift checks to consumers.

At present, the function and range of gift checks have evolved, embracing the ever-growing e-commerce market through e-gift cards. In fact, a number of establishments which issue gift checks even go on to partner with other establishments to offer more flexibility and convenience to consumers in terms of use and choices of goods and services. Other establishments also offer their gift checks at a discount or in differing denominations to the consumers.

Since gift checks are now widely accepted in the country, and pursuant to the policy of the State to protect the interests of the consumers, the Congress deemed it appropriate to pass Republic Act No. 10962, or the “Gift Check Act of 2017,” to regulate the issuance, use and redemption of gift checks.

In its legal sense, a gift check is any instrument issued to any person, natural or juridical, for monetary consideration, honored upon presentation at a single merchant or an affiliated group of merchants as payment for consumer goods or services. As an instrument representing value held in trust by the issuer thereof on behalf of its beneficiary or bearer, consumers must not be unduly deprived of the value of their money. Accordingly, the Gift Check Act of 2017 mandates that gift checks should remain valid until the cessation of business of the issuer. Stipulating expiration dates on gift checks and/or the stored value or credit therein is explicitly prohibited and considered unlawful.

Interestingly, however, coupons and vouchers are not covered by the Gift Check Act of 2017. Coupons and vouchers are instruments issued to any person, natural or juridical, for monetary consideration or otherwise, that entitle the holder to a discount of a particular good or service, or that may be exchanged for a pre-identified good or service specified in the instrument. As distinguished from a gift check, a coupon or voucher is not used as payment per se but as a means of entitling a consumer to a discount or an exchange for a pre-identified goods or service. Loyalty rewards and promotional programs are likewise expressly excluded from the coverage of the law.

So as to safeguard the rights of the consumers arising from other relevant laws and regulations, the Gift Check Act of 2017 also included a provision on the applicability of promotional programs, warranties, return policies, and senior citizens and persons with disability discounts in the purchase of goods and services with the use of gift checks.

In short, these benefits provided under relevant laws, rules and regulations can still be availed by consumers even if they pay through gift checks.

Any person who violates the provisions of the Gift Check Act of 2017 shall be obligated to return the unused balance of the gift check within ninety (90) days from the declaration of the violation by the DTI, and shall be subject to a fine ranging from five hundred thousand pesos (P500,000.00) to one million pesos (P1,000,000.00).

With the passage of the Gift Check Act of 2017, consumers now enjoy more control on the use of gift checks. Having that freedom, it gives gift checks added value not only to consumers, but also to the issuing establishments, which already received the corresponding value of the gift check at the time it was sold to the consumer.

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