Legal issues regarding vouchers

Overview

Vouchers are very important for both retail and service companies. However, contractual framework conditions for issuing vouchers are rare. Furthermore, there is no explicit legal regulation for vouchers in Austria. Unless there are specific provisions in particular cases – for instance in form of General Terms and Conditions (GTC) - the contractual basis for vouchers must be derived from the general provisions of Austrian civil law.

First of all, it is important to know that a voucher is not a payment instrument or a form of exchange. In fact, according to the prevailing view, by purchasing the voucher, the actual contract is already concluded. Therefore, the buyer of the voucher - or the recipient of the voucher - has the right to choose: If no restriction to a specific product or service was already defined at the time of purchase, the holder of the voucher can choose from the issuer's entire product range. In individual cases, however, other possible contract types, such as option contracts, may also be considered for voucher contracts.

Possible controversies in practice

There are various legal aspects relating to the classification of vouchers that always depend on the circumstances of the individual case. For instance, it is important to distinguish whether vouchers are issued and redeemed by a single legal entity or whether they can be redeemed at several (affiliated) companies or even via third-party providers. Some of these relevant issues are presented here by way of example:

• Limitation period: Unless otherwise agreed, vouchers expire within the general limitation period of 30 years. Although it is permissible to shorten the limitation period in individual cases, such a shortening is not permissible without restrictions, since the contract partner will often be a consumer. For example, the Austrian Supreme Court ruled that a limitation period of only one or two years for tourist service vouchers was grossly disadvantageous and thus inadmissible.
• Company closing: If a company stops its business, vouchers do not lose their "validity" or become worthless, contrary to the view sometimes expressed by companies. From a legal point of view, this is rather a case of so-called subsequent impossibility (“nachträgliche Unmöglichkeit”), which means that the holder of the voucher can reclaim the amount paid by the purchaser for the voucher.
• Insolvency of the issuer: As a result of the opening of insolvency proceedings against the assets of the issuer of the voucher, the "claim" documented in the voucher is converted into a monetary claim. In this case, the holder of the voucher has an insolvency claim which  can be claimed in the insolvency proceedings and for which he*she will receive satisfaction on a pro-rata basis. However, due to the costs of filing insolvency claims (EUR 25), such a filing will rarely make economic sense, which means that in many cases vouchers are in fact worthless as a result of the opening of insolvency proceedings.
• Vouchers within a group of companies: If vouchers are issued by a company within a group and is it also possible to redeem these vouchers at other companies affiliated with the group, this can lead to problems with regard to the prohibition of the repayment of capital contributions (Verbot der Einlagenrückgewähr) applicable to companies domiciled in Austria. This is always the case if the holding company issues the vouchers and receives the money, and the holder of the voucher then redeems the voucher at a subsidiary. In these constellations, therefore, an intra-group settlement must always be ensured.
  
  

Conclusion

Although vouchers often only relate to small amounts, the resulting legal problems are manifold and should not be underestimated. Especially in the case of basic legal issues that affect a large number of vouchers or have an impact on other areas of law such as corporate law, a more detailed analysis of the legal grounds, eg in the form of "General Voucher Terms and Conditions", should be implemented in any case.