Did you know certain cards are not included in BC’s gift card law? In this blog post, we’ll show you how to figure out if your card is a regular retail gift card (which we oversee) or a general use prepaid card (which are regulated federally), and tell you where to go if you need help. Sound a bit confusing? It can be so read on for more information.
First things first, it’s important to know that there are different kinds of gift cards. There are what you would typically think of as a gift card (such as a gift card/certificate to a specific store or restaurant), and mall cards (a gift card that you would get at a mall that can be used at any of the mall’s stores). We call those retail gift cards. There are also pre-loaded cards that are associated with a bank and are often branded with the name of a payment network such as American Express, MasterCard or Visa. Let’s call those general use prepaid cards.
What is a retail gift card?
Consumer Protection BC looks after BC’s gift card law (called the Prepaid Purchase Cards Regulation). This law covers such topics as expiry dates (cards for specific services can expire, but cards for a general dollar amount cannot), when fees can be charged (for replacing a lost or stolen card, for example), and what information has to be provided to the purchaser such as any limitations on use. We have more information about BC’s gift card law.
What is a general use prepaid card?
Things may start to get a bit murky as I turn to general use “prepaid cards”. These fall under Canada’s Prepaid Payment Products Regulations which we don’t oversee.
Let’s recap, at a very high level, these are cards that are:
- Issued by federally-regulated financial institutions (such as a bank) and,
- Preloaded with funds, and can be used to make purchases or cash withdrawals through a payment network (like American Express, MasterCard or Visa).
It gets a little confusing because these cards are not included in BC’s gift card law (they’re overseen by the Financial Consumer Agency of Canada), but you can usually also find them in places where you might normally buy a retail gift card such as in the checkout line at your local grocery store.
How do I tell which type of card I have?
The number one way to tell whether you have a retail gift card or a general use prepaid card is to turn the card over – is there a name of an issuing institution (such as a bank, trust or loan company) on the back? If there is, you likely have a prepaid card that falls under the federal Prepaid Payment Products Regulations (which is overseen by the Financial Consumer Agency of Canada). If there isn’t, you may have a card that falls under the Prepaid Purchase Card Regulation (which we oversee).
We hope you found this information helpful!
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Frequently asked questions – Financial Consumer Agency of Canada
39 thoughts on “It looks, smells and tastes like a gift card…but is it?”
I believe that Vancity is a BC credit union and has a enviro Reloadable Visa .. so I’m surprised at the comment that you’re not aware of any credit union issuing prepaid cards…
Hi Tracy, thank you for leaving us a comment. We looked into this and it’s our understanding that the enviro Reloadable Visa card by Vancity is issued by Citizens Bank of Canada which is regulated under the Bank Act. Therefore the card would be exempted under BC’s prepaid purchase card law. I hope this information clarifies things for you!
I’m hoping you might be able to help me. I recently purchased a $25 Google Play gift card at a 7-Eleven. I was charged PST. I’ve never paid PST on this type of gift card. I reached out to their head office and their District Manager informed me (via email today) that Provincial laws regarding gift cards have changed and BC now charges PST.
Is this true? I just purchased 2 other gifts cards (Google Play & iTunes) today at the Superstore and did not pay GST.
Is this really the case?
Hi Laura, thank you for your question! While we do oversee BC’s gift card law, these rules only speak to what cards are considered gift cards, what cards are allowed to expire and what cards are allowed to have extra fees or charges. (Information about BC’s gift card law can be found on this page on our website: http://www.consumerprotectionbc.ca/consumers-other-businesses-home/how-can-we-help/gift-cards). In short, our law is silent on whether or not businesses can charge taxes on gift cards.
That said, my suggestion would be for you to contact Canada Revenue Agency as they are responsible for administrating Canada’s tax laws and will more than likely have the information you’re looking for — here is a link to their “Contact Us” page: http://www.cra-arc.gc.ca/cntct/menu-eng.html
I hope this information was helpful to you!
I just purchased a gift card at 7-Elevenand was charged PST not GST. Can you explain why, as this is the province not federal government tax?
Hi Greg, thanks for your question. As I mentioned in the post above yours, our law is silent on whether or not businesses can charge tax on gift cards (our law speaks to expiry dates, and fees, etc.). If you have questions about taxes I would suggest contacting the provincial government about it. I found a contact for you for questions relating to taxes here:
1 877 388-4440
Generally speaking, it is my understanding that when you buy a gift card, you wouldn’t pay tax on the gift card (unless it is for a specific good or service – then the tax might be included with the purchase of the gift card). The merchant will charge the tax when the gift card is used to pay for a taxable item with the gift card. For example, you pay tax on a sweater you buy with a gift card, the same as you would when you pay with cash or credit.
This info came from this page from the CRA here: https://www.canada.ca/en/financial-consumer-agency/services/payment/gift-cards.html.
Again, this is not our area of authority, so I can’t say for sure. i would suggest contacting the BC government to confirm the laws around that.
I hope this is helpful!
Toll free numbers are exasperating. I have found I am put on hold for up to 45 minutes with loud, annoying, music blaring.
I purchased an iTunes gift card with my receipts and verification codes matched up and accounted for. While atwmptinf to use the card balance that had been added to my account, the account was disabled and I was unable to use, transfer or be refunded for the balance that was outstanding. They said that due to my scoundrel being closed there was no further action that could be taken. I never used the card to purchase anything, but I added it’s balance to an account what decided to close without explanation, and without being able to provide me with any compensation.
This seems like a violation due to me purchasing the card, and never using any portion of its balance for a transaction.
Could you shed more light on this or point me to the place the information that would answer this would be found for reference?
Hi Kael, thank you for reaching out to us. I would suggest contacting iTunes customer support to see what happened to the balance and make sure to keep track of all communications while doing so. If you are unable to secure a refund, you can submit a complaint through our website. Please note that we will need a record of what the business is saying about why the card balance can’t be used or transferred.
Foodora is selling “gift cards” that can only be used once, where any remaining balance becomes unusable. Is this legal? They deliver food as a service, but you also pay for the food through them.
Hello M and thank you for sending us a question! This gift card system seems certainly unusual. Would you be able to fill out our complaint form? That way we would be able to determine if we need to investigate the business practices. Thank you!
I would say Don’t get any gift card that will “ “take” Your money. Seriously that is a form of stealing. It’s your money and you decide when and how to spend it. The fact you have a gift card for that “said” company gives them confidence your going to spend it with them. So taking it like that is robing you for your loyalty in doing business with them in my opinion. If it’s not illegal it sure should be. Sincerely S.Bergen
I purchased a 10 pass squash card at our community rec center for $70. When I went to go play a game, I was told my card was no longer valid as it had been over one year since the date of purchase. Can the municipality apply a expiration date on this type of card?
Hi Gregor, thank you for contacting us with your question. Sounds like you have purchased this card so it wouldn’t qualify as a gift card. So unfortunately, this means that the rec centres are allowed to set their own policies around how soon these punch cards expire.
Could you please clarify why a 10 pass card doesn’t qualify because it was purchased?
Hi Sarah, thank you for your question. I checked in with Shoko and it looks like part of her sentence is missing there.
What that sentence is supposed to say is “sounds like you have purchased this card – for a specific good or service – so it wouldn’t qualify as a gift card”. So this means that “gift cards” that are sold for a specific good or service (like a haircut or specific fitness class) are allowed to expire under the Prepaid Purchase Card Regulation.
If you purchased a gift card that was for a specific dollar amount ($60 dollars towards a salon or clothing store) the card would not be allowed to expire. Does that make sense? I know it can be a little tricky.
Here’s a blog post that has a helpful graphic for reference.
There’s also this one here, that talks about how gift cards that you receive for charitable or promotional purposes are also allowed to expire.
I hope this clears things up and please let me know if you have any questions 🙂
Hi there. I’m trying to figure out what can expire and what can’t. The specific example I’m curious about is if a market or craft sale issued vouchers for customers to purchase goods from the vendors would those be allowed to expire? I’ve visited some markets where you can purchase vouchers with a dollar amount from the organizers via a Square machine (if you don’t have cash). You then buy goods from vendors who then return the vouchers and get reimbursed. Hopefully that makes sense…
Hi Jim, this is a great question – thank you for asking! It’s our understanding that this type of “market vouchers” would fall under BC’s gift card law. As it is similar to “mall cards” which are the gift cards for shopping malls, it can have a post-purchase fee. We’ve written a blog post about this so take a look – What happened to the balance on my gift card? I hope this blog post provides you with further information that is helpful to you!
I recently purchased a $50 Roblox gift card from my local 7-11. When paying, the cashier advised me that the total was $53.50 because I was charged 7% PST. I have never paid taxes on any gift card. He told me that on some cards you have to pay tax and on some you don’t.
Roblox is an online video game. Are these gift cards considered different than normal retail gift cards or was the retailer mistaken in charging me tax?
Hello and thank you for your question. Generally speaking, taxes are not charged to gift cards in BC. That said, my suggestion would be for you to contact Canada Revenue Agency as they are responsible for administrating Canada’s tax laws and will more than likely have the information you’re looking for — here is a link to their “Contact Us” page: http://www.cra-arc.gc.ca/cntct/menu-eng.html
I hope this information was helpful to you!
Hi. I had purchased a gift certificate for a helicopter flight at a non profit auction and was told there was no expiry on it (<2 years ago). The GC was donated by ththe local business. Now I called to redeem this and they told me it expired after one year? Is this allowed to expire? I though gift certificates had to be valid for at least 5 years? I am pretty disappointed that they won't honour it seeing as they are still operating and it was a substantial amount of money.
Hi Stephanie, gift cards/certificates for a cash value are not allowed to expire (for example if the certificate was for $100 towards the helicopter flight). However, any gift card or certificate that’s used for promotional purposes (like an auction) isn’t captured in the law, so it can expire. And there’s no certain time the business can choose to use – so it could be 2 months or 2 years, that’s up to them. Also, just so you know, any gift certificate for a specific service (like a helicopter flight) is also allowed to expire. The reason for this is that the cost for the business to deliver a service changes over time. I hope this answers your question. Thanks for reaching out!
Good morning. We had purchased a gift card from a sushi restaurant in Dec of 2017. we went to use it the other day and were told that because the restaurant had changed hands they did not have to honour it. I have been told that this is true and that it is up to the discretion of the new owner. Please confirm. Thank you
Hi Heather, unfortunately this is something that is not spoken to under BC’s gift card law, so you are right – it’s up to the discretion of the new owner. I hope you can contact the restaurant again and they can honour it for you.
Hello, I see this taxing gift cards is not new. I bought a $50.00 xbox live card and was charged pst at the time of purchase and my son was also charged when he redeemed the cash for a game. I tried the bc government and xbox and each says they are doing nothing wrong. I want to go to the media, but wondered if anyone has had any success with contacting CRA or any other outlet?
Hi Lisa, thanks for your question. Generally speaking, it is my understanding that when you buy a gift card, you wouldn’t pay tax on the gift card (unless it is for a specific good or service – then the tax might be included with the purchase of the gift card). The merchant will charge the tax when the gift card is used to pay for a taxable item with the gift card. For example, you pay tax on a shirt you buy with a gift card, the same as you would when you pay with cash or credit. This info came from this page from the Financial Consumer Agency of Canada here: https://www.canada.ca/en/financial-consumer-agency/services/payment/gift-cards.html if you would like to reference it in future communication with gov.
The folks to talk to about tax laws can be contacted here:
1 877 388-4440
Alternatively, the FCAC (who wrote the page I linked above), can be contacted here: https://www.canada.ca/en/financial-consumer-agency/corporate/contact-us.html
If you’ve already contacted that specific contact about this and not been able to get an answer, I’m not sure where to point you. However, the link I shared above comes straight from the FCAC website, so they should be in agreement on that topic – very odd.
I hope you’re able to reach a solution and best of luck!
Hello Amanda, I have three emails from
CTBTaxQuestions@gov.bc.ca saying the cash gift cards were taxed correctly even though we paid again when redeemed at the store for goods ( they didn’t comment on that part of our emails). Very frustrating but thank you for the alternative FCAC contact information I will try them and thank you for the fast response.
Hi, A little over two years ago I purchased a pair of sandals from a boutique. When I returned the sandals (because they didn’t fit my child), the owner issued a Gift Certificate for the exact amount the sandals cost. There’s no expiry date on the paper and all it says is ‘exchange’ on the line of goods. Well I went to the boutique recently and found they closed but are still selling shoes online under the same business name. I contacted them and was told the Gift Certificate expires after 1 year and that it’s ‘Legal Retail Policy’. What are my options now to use my Gift Certificate?
Hi Cassaundra, thanks for reaching out to us here. So, according to the gift card laws we oversee, a return/exchange card is not considered to be a gift card. These cards are issued to a consumer due to the return/refund policy of the store. Here in BC, retail stores are allowed to set their own refund and exchange policies so the store is allowed to set an expiry date on a return/exchange card. Although the person who gave you the card should have told you about the expiry date, the store is within their rights to put an expiry date on the card. If you’re unable to work it out with the business, then you may be out of luck for redeeming the value of the card. While I know this was not the answer you were looking for, I hope this information is helpful in the future.
Hello – if I pre-purchased an admission pass at a discounted price with an expiry date, is it only the promotional value of the pass that expires or does the whole pass expire (i.e. cannot use pass or paid value after expiry date)?
E.g. purchase a $10 admission pass for discounted price of $5, but pass expires in 3 months. Do I lose the right to use the pass after the 3 months or do I lose the promotional value of the $5 but can still use the pass if I pay another $5 (so it totals $10)?
Hi Karen, thanks for reaching out to us here. If you purchased a card that was sold as a promotion (at a discounted rate), the entire amount is allowed to expire. I hope that answers your question.
Are there any rules that prevent retailers from preventing a gift card to be used to purchase another gift card?
Hi Jason, thanks for your question. I can tell you that the laws we’re responsible for do not address this issue. It’s my understanding that this would be up to the business to decide – however they should have this information in their terms and conditions and make it available when people purchase gift cards from their store (it could be on their website or on the receipt when you purchase the gift card). Out of curiosity, would you mind elaborating on why you would want to purchase a gift card with a gift card?
Would gift widely distributed gift cards be a good strategy for local and small retail businesses to help them mitigate the negative effects of the COVID-19 shutdowns? For those small business owners who are trying to use gift cards as a strategy to acquire cash to help them recover from COVID-19 imposed shutdowns, what regulations on gift cards should be carefully considered, especially those regulations that might impede the wide distribution and sale of gift cards? Are there specific regulations that affect the mass marketing of gift cards?
Hi Richard, we can’t give you business advice so please understand that’s not what we are doing here, but you may want to read through the Prepaid Purchase Cards Regulation. Please also take a look at our gift cards page, where we outline the laws around gift card expiry dates and fees. I hope this helps!
Is a Westjet Travel Bank credit covered by the consumer protection act? If I read the act is says “a “prepaid purchase card” means a card, written certificate or other voucher or device with a monetary value that is issued or sold to a person in exchange for the future supply of goods or services to a consumer.” So it would seem to apply as it would likely classify as a voucher or device that was issued to a person in exchange for future supply of a service.
Hi John, do you have some Westjet travel bank credits? We would like to get more information from you about the reason behind your question on prepaid purchase cards. Can you please submit a formal complaint on our website using an online form? Here is the link to it.
Hi. I have purchased a book of 8 vouchers for a local barbershop. At the time of purchase, the voucher was good for a haircut of any kind. but during my recent visit, they changed the rules to limit voucher use only to “super short hairstyle” that can be cut with a trimmer. Not only I wasted all the money paid to get the voucher book, now the price for a regular haircut is doubled.
On each voucher, in fine print, it reads “No cash value, no refund.” The organizer reserves the right to cancel, terminate, modify or suspend this voucher without prior notice if the event can not be executed due to special reasons for force majeure.”
Is there anything I can do in this case?
Hi Joe, thank you for getting in touch with us. Sounds like you have purchased your vouchers at the barbershop itself so it should fall under BC’s gift card law (unless I’ve missed some details). It would be allowed to have an expiry date under the law because each voucher is specifically for a haircut. However, the business should not be able to add more fees or charge extra. We have more information on this on our website. Please read through the page and if you think the business is not following the rules, please feel free to fill out an online complaint form.