Even gift vouchers policed by new act
Johannesburg - The Consumer Protection Act (CPA), due to come into force on April 1, provides consumers with a new and more comprehensive safety net.
It will provide stricter regulation of the conditions attached to a range of goods and services, including gift certificates and prepaid vouchers.
Aneeka Savahl, a senior associate in corporate and commercial practice at Cliffe Dekker Hofmeyr business law firm, said on Wednesday that such prepaid devices will be more strictly regulated and "will arguably become more complicated for suppliers to manage".
Savahl said the CPA effectively legislates a minimum validity period of three years in respect of prepaid devices - it will not expire until the full value is redeemed or a date three years after the date of issue, whichever is the earlier.
Suppliers can agree to extend this validity period.
Savahl explained that the act does not mention the minimum expiry date, and creates some uncertainty regarding the meaning and effect of the expiry after three years.
She argues that a part of wording of the act creates a strong argument that a bearer of a prepaid device - who may not be the original buyer - will be able to demand cash for the unredeemed value even after it has passed the three-year expiry date.
Savahl explains: "The CPA stops short of explicitly stating that the bearer has a right to demand payment in cash for the remaining value of the prepaid device after its expiry. But it appears to be the only logical conclusion flowing from the provision stating that the bearer of a prepaid devices remains the owner of the consideration paid for the prepaid device and not redeemed."
Savahl says that suppliers must exercise due care, diligence and skill and must make provision for contingencies.
Currently many suppliers sell prepaid devices of indefinite validity, but for those who do not, these provisions may create some practical challenges.
It will provide stricter regulation of the conditions attached to a range of goods and services, including gift certificates and prepaid vouchers.
Aneeka Savahl, a senior associate in corporate and commercial practice at Cliffe Dekker Hofmeyr business law firm, said on Wednesday that such prepaid devices will be more strictly regulated and "will arguably become more complicated for suppliers to manage".
Savahl said the CPA effectively legislates a minimum validity period of three years in respect of prepaid devices - it will not expire until the full value is redeemed or a date three years after the date of issue, whichever is the earlier.
Suppliers can agree to extend this validity period.
Savahl explained that the act does not mention the minimum expiry date, and creates some uncertainty regarding the meaning and effect of the expiry after three years.
She argues that a part of wording of the act creates a strong argument that a bearer of a prepaid device - who may not be the original buyer - will be able to demand cash for the unredeemed value even after it has passed the three-year expiry date.
Savahl explains: "The CPA stops short of explicitly stating that the bearer has a right to demand payment in cash for the remaining value of the prepaid device after its expiry. But it appears to be the only logical conclusion flowing from the provision stating that the bearer of a prepaid devices remains the owner of the consideration paid for the prepaid device and not redeemed."
Savahl says that suppliers must exercise due care, diligence and skill and must make provision for contingencies.
Currently many suppliers sell prepaid devices of indefinite validity, but for those who do not, these provisions may create some practical challenges.
Comments
Post a Comment