Merchants must abide by certain rules regarding contracts for prepaid cards and rewards programs. Here is the information you should know.

A prepaid card (or gift card) is a medium of exchange obtained further to a payment made in advance. It can be redeemed for a specific item or service or used as cash.

Contents of the contract

Before entering into a contract for the sale of a prepaid card, the merchant must provide you with certain mandatory information. This information must be found on the card itself or in an accompanying written document. In any case, you must have clear information on:

  • the terms of use of the card, such as the business or businesses where it can be used;
  • any fees that may be charged to issue or use the card, in cases where such fees are permitted by law;
  • how to check the card’s balance (the amount left on it);
  • the date on which the merchant requires that the card be replaced, if applicable.

When it can be redeemed for a determined item or service, the prepaid card or the accompanying written document must also indicate the date as of which the merchant may charge a supplement to provide the item or service.

Prohibited practices

Merchants are prohibited from:

  • indicating an expiry date on the card, other than in cases where the contract provides for unlimited use of a service;
  • charging fees to use the card, other than if it is a card that can be used as cash with several independent businesses or that is issued by a financial institution (e.g., a gift card from a shopping centre or a prepaid credit card);
  • charging fees to replace the card, if the card is to be replaced at the merchant’s request.

To find out more

For complete information based on the type of prepaid card, refer to the following sections:

Rewards programs (also known as “loyalty programs”) are governed by law.

Small rewards programs, such as those that allow you to obtain free of charge or at a discount goods or services valued at less than $50 each, are exempt from these rules.

Contents of the contract

Before signing up for a rewards program, the merchant must inform you in writing of:

  • the conditions to receive exchange units (points, dollars, stamps, etc.);
  • the applicable terms under which these units can be redeemed;
  • the terms under which the exchange units will expire, if applicable;
  • the rate used to convert the exchange units to another form of exchange unit, if applicable.

To find out more

For more information, including on amendments to an agreement or the expiry of exchange units, refer to the section titled Rewards Programs.

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Last update : May 26, 2023

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The information contained on this page is presented in simple terms to make it easier to understand. It does not replace the texts of the laws and regulations.