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FASA ANSWERS YOUR QUESTIONS AROUND THE CPA

For those franchisors who deal with prepaid certificates, credits and vouchers – take heed! The CPA has some strict guidelines on this type of marketing – one of our members, a restaurant group – had this query which Maria D'Amico of D'Amico Inc Attorneys answered.

QUESTION:

A diner with a gift voucher for R350 used the voucher for a meal which came to R306 and told the waiter he could keep the change from the voucher. As it clearly stated on the back of the voucher that 'this cheque may not be exchanged for cash and no refund will be made should the holder not utilize the full value thereof" the manager told the waiter he could not be paid the 'tip' in cash but would give it to him in voucher form. The diner objected, saying this was in violation of the new Consumer Protection Act.

ANSWER:

Maria D'Amico advises as follows: Section 63 of the Consumer Protection Act no 68 of 2008 ("CPA") deals with prepaid certificates, credits and vouchers. Section 63(2) of the CPA states that a voucher will not expire until the full value of the voucher has been redeemed, refer to section 63(2)(a), or a period of three years since the issue of the voucher has lapsed, refer to section 63(2)(b), whichever is the earlier date. Section 63(3) furthermore states that the consideration paid by the consumer for such a voucher remains the property of the bearer of the voucher to the extent that the voucher has not yet been redeemed. So although the CPA stops short of stipulating that the bearer of a voucher has the right to demand payment in cash for the remaining value on the voucher, this seems to be a logical explanation to section 63(3). In light of this it could be argued that the view adopted by the consumer that the balance of the voucher be redeemed as cash, and be paid to the waiter as a tip, is a valid one. It is also arguable that the disclaimer by the supplier on the reverse of their vouchers stating that they may not be exchanged for cash, could be invalid in terms of the provisions of section 63(3) of the CPA.

 
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CONSUMER COMMISSIONER SERIOUS ABOUT ENFORCING THE CPA
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FASA ANSWERS YOUR QUESTIONS AROUND THE CPA
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FASA'S GOLF DAY ENJOYED BY ALL
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Date: 20th October 2011
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