Barbeques Galore customers burnt by gift cards - is it legal?
Barbeques Galore's collapse into voluntary administration on February 12 has left many consumers feeling burnt, especially those holding gift cards.
The retailer is still accepting gift cards, but now only if customers spend double the value of the voucher in cash. For example, redeeming a $50 gift card requires making a $150 purchase, with the shopper paying $100 out of pocket
This has left many asking the same urgent question:
Is this legal?
Under the Australian Consumer Law (ACL), gift cards must:
- Have a minimum three-year expiry,
- Clearly display key conditions and restrictions, and
- Not include post-supply fees that reduce their value.
But these rules apply to businesses operating normally - not businesses in insolvency. When a company enters external administration, the rules change.
An ACCC spokesperson acknowledged that consumers' ordinary legal rights can be affected by a company entering administration.
"What happens to consumers' rights with respect to outstanding orders, credits, gift cards and refunds will depend on what happens in the administration process," the spokesperson says.
"The administrator may place specific conditions on honouring transactions. For example, only honouring gift cards if people spend an equivalent amount on products or services to the amount redeemed on the gift card transaction."
The ACCC advised affected customers to contact the administrator. In this case, the directors of Barbeques Galore have appointed Philip Campbell-Wilson, Lisa Gibb and Matthew Byrnes of Grant Thornton as voluntary administrators.
Why administrators can do this
Once a business enters administration, gift card holders become unsecured creditors, which means they sit far down the insolvency priority list:
- Liquidation and legal fees
- Secured creditors
- Priority unsecured creditors (e.g. employees owed wages/super)
- Unsecured creditors - including gift card holders
Gift cards do not guarantee the money spent on them - they are merely a right to claim goods under specific terms and conditions.
As consumer advocate Christopher Zinn told Money in 2020: "As an unsecured creditor, you have few options - wait and hope, or put more money in to use the gift card and walk away with the goods quick smart."
This is why administrators often choose to not honour cards at all, or honour them only if consumers pay extra - to avoid draining stock or cash that belongs to the creditor pool.
Chamberlains Law Firm notes this is common, because honouring gift cards reduces available assets for creditors, offering minimal benefit to the administration.
What consumers should do now
1. Use the voucher promptly
If you can meet the conditions, redeem the card before circumstances worsen.
2. Consider a chargeback
If purchased with a credit/debit card or PayPal, your bank may reverse the transaction - but time limits apply.
3. Register as a creditor
It's a long shot, but may yield a partial recovery.
4. Keep every document
Receipts, gift card numbers, and order confirmations.
5. Monitor administrator updates
For Barbeques Galore, that means Grant Thornton.
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