/ Money

Why I avoid gift vouchers and hamper schemes

Picnic basket

Do you use savings schemes to put money aside for special occasions? Do you prefer to give gift vouchers as gifts? If you do, be warned, you could be in murky waters should the company go bust.

You’ll probably remember the Christmas club business Farepak going bust in 2006. The story reappeared in the headlines last week when six years on, those who lost out found out they’d get half their money back.

The Farepak case has left many people wary of similar savings and hamper schemes. After a five-year wait, Farepak savers will have received back just half of what they put in. And there’s nothing to say a similar case couldn’t happen again.

Up to £85,000 protection

In recent years shoppers and savers have become more aware of the protection offered by the Financial Services Compensation Scheme. Up to £85,000 per person per licensed institution is covered.

But what is less well known is the wide array of financial products that offer little or no protection if a company goes bust. Retailer vouchers and gift cards aren’t covered, nor are most Christmas clubs and retailer savings stamp schemes.

The lack of protection extends to retailer loyalty point schemes too. It’s highly unlikely that giants like Sainsbury’s or Tesco are going to go bust, but it’s worth bearing in mind, particularly with smaller retailers.

Wine and stamp investments

There are plenty of other products that may not come with the full consumer protection you expect. Foreign currency exchange, property investment clubs, land-banking schemes, alternative investments like wine or stamps, peer-to-peer lending, carbon credits, the list goes on…

Many of us will be saving up now to avoid having to put Christmas on our credit cards. Putting a regular amount aside is a sensible move and one best done via an instant-access savings account. You can then relax in the knowledge your money is protected.

Have you been left empty-handed by the collapse of an unregulated scheme such as a Christmas scheme, or lost out on vouchers due to a company going bust?

Deborah says:
9 December 2012

I save for Christmas every year as my income is low and have in the past put funds into a credit union but decided to go into our local pub savings scheme as there was nights arrange and football cards sold every week, to ensure that a bonus was paid out to everyone. I got paid out on Saturday night and it was £75 short but even worse my cousin who volunteers to help run it did not get the £800 she had saved as the money was short. I don’t think there is anything she can do but was hoping someone might be able to advise what the best course of action is.

I will be going back to the credit union next year.


Hi Deborah – really sorry to hear about your experiences. I agree with Debs and Louise – something has clearly gone wrong here and you shouldn’t have been left out of pocket.

Unfortunately, this kind of savings scheme isn’t regulated, so there’s no regulatory protection if things go wrong. From the details you’ve given, it sounds like this might be a case of fraud – I’d definitely report it to the police and possibly take advice from your local Citizens Advice bureau.

Good luck! And I hope you have a great Christmas in spite of this.


It wouldn’t be the Royal Oak in Shrewton would it? Apparently the landlord has done a runner to France.



Deborah this is outrageous. Why have you been paid less than you saved? This sounds like theft, to be honest if it was me and my savings I would go to the police. Do you have a card that is signed everytime you saved so you had a record of payments and the signatory that took the money. I cannot believe that the way some people can do this and sleep at night. Bloody outrageous. Get together with your cousin and go to the police.


Deborah I agree I would go to the Police. This is the problem with these types of savings schemes and as a Farepak Victim – I also have learnt the hard way along with 116,400 others! They are not regulated therefore your money is not protected.

I now also save my christmas money with the Credit Union.

I hope you get justice Deborah – let us know how you get on.