Gift Check Act of 2017

Case Overview and Summary

Summary of Republic Act No. 10962 (Gift Check Act of 2017)

Declaration of Policies (Section 2):
- Protect consumer interests, promote general welfare, and establish standards for business conduct.
- Promote fair, honest, and equitable consumer transactions.
- Protect consumers against deceptive, unfair, and unconscionable sales practices.
- Ensure the best interest of consumers in interpreting and implementing the law.
- Recognize that a gift check represents value held in trust by the issuer for the beneficiary.
- Prevent undue deprivation of the value of consumers' money.

Definitions (Section 4):
- Gift Check/Gift Certificate/Gift Card: An instrument issued for monetary consideration, honored as payment for goods or services at a single merchant or affiliated merchants. It can be paper, card, code, or device, and remains valid until the issuer ceases business. (Section 4a)
- Coupon or Voucher: An instrument issued for monetary consideration or otherwise, entitling the holder to a discount or pre-identified good or service. (Section 4b)
- Issuer: Any person, natural or juridical, who provides the instrument that holds value for exchanging consumer goods or services. (Section 4c)

Prohibitions (Section 5):
- Issuing a gift check that bears an expiry date. (Section 5a)
- Imposing an expiry date on the stored value, credit, or balance of the gift check. (Section 5b)
- Refusing to honor the unused value, credit, or balance stored in the instrument. (Section 5c)

Exclusions (Section 6):
- Gift checks issued under loyalty, rewards, or promotional programs, as determined by the DTI, are not covered by this Act.
- Coupons or vouchers as defined in Section 4(b) are not covered by this Act.

Instances Where Issuers and Accredited Merchants May Refuse to Honor Gift Checks (Section 7):
- When the gift check is lost due to no fault of the issuer. (Section 7a)
- When the gift check is mutilated or defaced due to no fault of the issuer, preventing identification of security and authenticity features. (Section 7b)
- Issuers may prescribe reasonable rules for changing, upgrading, or updating the gift check, subject to DTI approval, without additional cost to the consumer, and without violating the Act's provisions. (Section 7)

Applicability to Promotional Programs, Warranties, Return Policies, and Senior Citizens and Persons with Disability Discounts (Section 8):
- Promotional sales activities, loyalty programs, warranties, return policies for cash purchases, and discounts for senior citizens and persons with disability under relevant laws and regulations shall apply to purchases paid with gift checks.

Transitory Provision (Section 9):
- Upon the Act's effectivity, all gift checks already issued shall be covered by its provisions.
- Holders of unused and unexpired gift checks shall be entitled to avail of replacement after revalidation by the issuers, at no additional cost.

Consumer Complaints (Section 10):
- Complaints for any violation of this Act shall be made in accordance with Chapter III, Title V of Republic Act No. 7394 (Consumer Act of the Philippines).

Penalties (Section 11):
- Any person, natural or juridical, who violates the Act shall be obligated to return the unused balance of the gift check within ninety (90) days from the DTI's declaration of violation.
- The violator shall be subject to a fine imposed by the Secretary of Trade and Industry, which shall be no less than five hundred thousand pesos (P500,000.00) nor more than one million pesos (P1,000,000.00).
- For the second offense, in addition to the fine, the issuance of gift checks by the offending issuer shall be suspended for three (3) months.
- For the third offense, in addition to the fine, the issuance of gift checks by the offending issuer shall be cancelled.

Implementing Agency and Implementing Rules and Regulations (Section 12):
- The DTI shall have exclusive jurisdiction in implementing this Act.
- The DTI shall promulgate the necessary rules and regulations within ninety (90) days from the Act's effectivity, after due consultation with appropriate stakeholders.

Repealing Clause (Section 13):
- All laws, executive orders, rules and regulations, or parts thereof, which are inconsistent with this Act are hereby repealed or amended accordingly.

Separability Clause (Section 14):
- If any article, provision, or portion of this Act is declared invalid or unconstitutional, the remainder of the Act shall not be affected.

Effectivity (Section 15):
- This Act shall take effect fifteen (15) days after its publication in at least two (2) newspapers of general circulation.