The current lockdown due to the COVID-19 virus is unheard of in the recent history of South Africa. It is also a very uncertain period in terms of income for the majority of businesses and with a very high probability of possible retrenchments in the months to come. Business owners are currently trying to think of alternative ways to generate income or to draw new clients once the lockdown ends. One of the alternatives is selling gift vouchers during the lockdown as a way of generating some sort of income. Unfortunately, this might not be an option for all industries. It is, however, a time to start thinking outside the box to determine what alternatives are available for your specific industry. Also, bearing in mind that a vast majority of employees might also not be earning their full salaries, or nothing at all a supplier might have to draw consumers with a discount of some sorts on vouchers, and thus should be mindful of discriminating against anyone when applying these discounts.
An example of using vouchers to draw consumers is a company who has specifically rolled out an On-Trade Support Programme for participating restaurants and bars in South Africa only. It encourages consumers to buy gift vouchers from the participating restaurants and bars, upon which the company will contribute a 50% in value to each voucher for free – in essence, if you buy an R100 voucher you will receive a voucher for R150.
- Selling gift vouchers –
It is important to bear in mind certain requirements of Section 63 of the Consumer Protection Act when selling gift vouchers in exchange for a period certificate, card, credit, voucher or similar device. It is not a requirement to add a rand value/price to a gift voucher, although it is advised to do so instead of stating a specific good/service as the price of the good(s) or service(s) might have increased by the time a consumer presents the gift voucher to the supplier.
- A practical example would be if a Hairdresser sells a gift voucher for a wash, cut and blow for R250.00 on 1 May 2020 and the consumer presents the voucher to be redeemed during 2022. By that time the same treatment might cost R350.00. If a supplier states “a wash cut and blow to the value of R250.00” then he/she would be entitled to ask the difference in price at the time the consumer redeems the voucher as the price of the treatment has since increased. If a supplier simply stated “wash, cut a blow” he/she might have to supply the treatment irrespective of which price was paid for the gift voucher as the application of the Consumer Protection Act leans toward the favour of a consumer.
- The validity of gift vouchers –
A Supplier is required to redeem all vouchers exchanged for consideration, for a period of 3 (three) years from the date of issue. Should a consumer, however, present a voucher after the 3 (three) year period it is entirely the Supplier’s discretion whether to honour the voucher or not.
- Discounts on vouchers –
Suppliers should be mindful when selling vouchers at a discount to no unfairly discriminate in terms of Section 8 of the Consumer Protection Act against a category of consumers. This includes that a supplier should not:
- exclude any person or category of persons accessing any goods or services;
- grant any person or category of person’s exclusive access to any goods or services;
- assign a priority of supply of any goods or services to any person or category of persons;
- supply a different quality of goods or services to any person or category of persons;
- charge a different price for goods or services to any person or category of persons;
- target particular communities, districts, populations, or market segments for exclusive, priority or preferential supply of any goods or services; or
- exclude a particular community, district, population or market segment from the supply of any goods or services offered by the supplier.
Section 9 of the Consumer Protection Act, however, stipulates that it would not be deemed discrimination if specific goods or services are reasonably intended or designed to satisfy any specific needs or interests that are common to, or uniquely characteristic of, that particular group of consumers i.e. giving a discount on vouchers to only pensioners.
- Giving away gift vouchers to draw consumers –
In such instances Section, 63 of the Consumer Protection Act will not apply since the consumer did not give consideration to the supplier in exchange for the voucher.
ABOUT THE AUTHOR
Stephanie Christensen obtained her BCom Law degree in 2004 and LLB degree in 2006 from the University of Stellenbosch. She completed her two-year articles and was admitted as an attorney in January 2009. She is currently a SEESA Consumer Protection & POPI Legal Advisor at the Cape Town Office.