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    Categories: Customer Experience

A letter to RedBalloon customers past, present and future

NSW 3 year expiry gift cards legislation

In 2001, when I thought it was a good idea to start a business from home, no one had ever heard of experience gifting in Australia. There were very few gift cards in the market and most gift certificates were handwritten by the business owner or retailer — untraceable and easily copied.

Gift cards have now become big business, and the sophistication and systems have changed materially in the last 16 years. They have become part of the gift giving landscape.

There was a time, however, when they were not so pervasive. Initially, when we approached experience suppliers they were very circumspect about the concept of an ‘experience voucher’. Many said “no” to joining us at RedBalloon. The same issue kept coming up: “If I sell an experience voucher for a price today, what if the cost to deliver the experience goes up? I’ll be out of pocket”. The only way we could get to represent them was by offering a six-month expiry date, which our suppliers agreed to honour for that period.

This, however, was not an ideal customer experience. With volume and reputation behind us, RedBalloon was then able to negotiate with the now thousands of experience providers we represent, to hold the price for 12 months. At the same time, we launched gift certificates and later gift cards in retail — all of which are consistently valid for 12 months.

What most customers holding a gift card don’t realise is that every retailer must have an expiry date for any type of voucher issued. Simply because retailers must, at some point, remit the tax component of the voucher to the Australian Taxation Office (ATO). Tax is not paid until after a voucher is either used or expires. Twelve months has been considered industry standard.

The toughest conversations I have ever had, with any customer, have been in relation to expiry dates. Nobody likes them, including us. We had put in place a compassionate policy and extension program and even reissued vouchers from time to time. But ultimately we, like everyone else, must expire them. For a customer obsessed business, this has never been easy. (And especially not for me personally).

We want people to go on their experiences and have a wonderful time. And maybe do another one. After all, we’re all about #experiencegifting.

RedBalloon’s 3-year gift cards in Australia & NZ

This change could be tough on our experience providers who already hold their pricing and the specific experiences offered, for 12 months. Three years is just too long. So, for customers who hold a specific experience voucher purchased from 18 October 2017, if the voucher is used before reaching that first 12-month mark, nothing will change. If the voucher moves into the next 24 month period, we will simply convert the experience voucher value into credit to be redeemed on anything on the site.

What this means is that our customers do not lose out, and our supplier community (many of whom are small business) do not have to maintain their prices for three years. For those customers holding a gift voucher for a dollar amount, or a retail gift card purchased in store, nothing will change. That value will be yours to use for up to three years.

To me as Founder this change is wonderful — it is music to my ears. Instantly, I can see all those tough customer conversations going away, more people doing more experiences. Everyone is happy.

There are thousands of RedBalloon customers out there currently holding vouchers with a 12-month expiry. I can only encourage you to use them before they expire.

You can read the official press release here, and, may I suggest that you subscribe to hear from us at RedBalloon.com.au/subscribe to stay up to date with more news.


Also published on Medium.

Naomi Simson :

View Comments (2)

  • Great article in how to manage client and customer expectations. Also shows how short-sighted some businesses are in embracing new ideas, technology and marketing. They then wonder why they get left behind and have to play catch up rather than embracing new ideas and relooking at their business to find a way to deal with potential cost increases.