/ 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?


I have never bothered with such schemes – as I have always planned then saved to buy an item – except for car and mortgage loans. It is just as easy to save in a bank account. But I do know that some like the idea of a weekly subscription reminder via a “Tally Man” . I actually do not know anyone personally who had suffered a saving scheme collapse.

I keep an eye on a few voucher websites and have ended up saving money on a few weekend breaks. OK, If I hadn’t bought the voucher I would have saved even more money, but I’ve always been pleased with the deals I’ve selected.

The only occasion when I’ve missed out was with a voucher my girlfriend bought recently for a Japanese restaurant. I can’t remember what was paid for the £40 voucher, but we had until August this year to redeem it. The restaurant went bust a few months ago. Pah!

Debs says:
28 July 2012

myself and Louise are from Farepak Victims Committee, we have been fighting hard for nearly 6 years we have lobbied hard with the full support of our MP’s Jessica Morden and Katy Clarke. We all met with Vince Cable and asked for regulations to be put in place, as a result of that meeting we are working with a lady called Marcelle from BIS and we are in the process of working through the system of pre payments to see wgat can be done. What the FVC are doing now is to release a new petition to stop the administrator/liquidator from making so much out of a collapsed company when their are others who lost money do not get a chance of getting anything back, its outrageous and has to stop. Take the Farepak case, BDO have charged nearly £9 Million and all they realised for unsecured creditors was just 13p per £ lost AND THAT NEEDS TO BE REGULATED

Andrew says:
4 October 2012

There are many unfortunate cases of people loosing money due to Christmas saving schemes. It really does need to be better regulated. As for gift vouchers it is important that people buy from larger retailers, the UK’s most popular gift card is Amazon’s. We recommend people also buy multiple store gift cards.

has anyone had money back from farepak in the last couple of months ,i ask because i was a customer and have not heard anythink yet.

debs says:
14 October 2012

No one has had anything back as yet we have been told it will be by the end of October. Farepak website has been updated and it states payments will arrive in 1-2 weeks. We have a Facebook page called farepak victims committee and your more than welcome there we have a moan and a laugh and more importantly any questions you have there is generally someone that has the answer. At the moment we have an online petition asking for a public enquiry which we need signing if you could help with that then that would be great.

Gift cards are not regulated either Andrew – Multiple store cards/vouchers that is what Farpak had – many of the shops that were on the Farepak voucher have now gone into administration/liquidation ie Woolworths JJB Sports Ethel Autin Peacocks etc and like Farepak Victims – those that bought vouchers from these stores – became Unsecured Creditors. I agree there needs to be Govt regulations put in place that protects the Prepayment Industry – New Zealand has the Layby Regulations far better than what we have here and something this Government should be looking at.

I think they (vouchers etc) should be banned or the law tightened up to make administrators honour them in full. Just hope no one here has any Comet vouchers. As it looks like another bites the dust.

m waite says:
22 November 2012

i was a customer involved in farpack, to the amount off £1130.00 since then i have moved got married, iv been back to my formal address they said they havent recived the queck!! but more to that iv sent off all my details twice now and still no reply anyone in the same sittuation as me can give me some advice on what to do next i feel like iv tryed everything but there not responding to my change of details thanks all 🙁

Did you finally get your money back from BDO?

Go to either Facebook and the page is farepak victims committee, or to our other site sas4uk.co.uk and you will find all the details and contact numbers that you need

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.

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.