Last-minute presents: is it a risk to buy a gift card?

The only time I buy gift cards is when American Express has an offer for spending at a particular merchant. For example, in the last two months, there have been offers to get £30 back for spending £100 at Selfridges and Harvey Nichols, £5 back for spending £15 at WHSmith, £20 back for spending £50 at Café Rouge, and £45 back for spending £150 at Gaucho. American Express’s terms and conditions for these offers always say that gift cards are excluded, but that’s just to protect Amex because a minority of merchants (e.g. Eurostar) sell their gift cards and vouchers via a third party merchant which wouldn’t qualify for the offer. In practice, most merchants sell gift cards under the same merchant code as direct sales of their goods and services. It’s a great way to buy gift cards at discounts of 30% to 40%, and the optimal method is to spend exactly the offer’s minimum amount on buying a gift card.

These offers are once per merchant per offer per Amex card (and a supplementary card on the same account counts as a separate card). The most successful offer for me was Harvey Nichols, which was repeated recently, where I managed to spend £100 11 times using multiple Amex cards, i.e. a total of £1100, giving a discount of £330.

If you don’t have an American Express card, then I strongly recommend getting at least one, particularly because of these frequent offers. The frequently-heard argument that a minority of merchants don’t accept American Express doesn’t apply, because I’m talking about using it specifically at these merchants that do accept it.

Gift cards are a no-no for me, as the risk of the recipient losing the money is too high. Best to give cash or cheque.

Surely the number one buying tip for gift cards:

* Tell the recipient to spend it in full and as soon as possible!

(Forget about the expiry date – how long to you want to be exposed for?)

Before the days of gift cards, gift vouchers rarely used to have expiry dates; they very reasonably remained valid indefinitely. When retailers started to issue gift cards instead of gift vouchers, retailers introduced two-year expiry terms on them, whereby the retailer gets to keep the gift card buyer’s money without redress after two years of no activity (although often checking the balance counts as activity). A contractual term that allows the retailer to keep the gift card buyer’s money, without giving any goods or services in return, lacks any objective justification. Retailers cannot argue that unspent gift vouchers cause them a cost or other problem because they receive interest on their value. Section 62(4) of the Consumer Rights Act 2015 states that “A term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer”. Section 62(1) states that “An unfair term of a consumer contract is not binding on the consumer”. Therefore I would argue that such expiry dates, without any objective justification, are not binding.

I notice that Ireland and Australia are introducing a minimum expiry term for gift cards of 5 years and 3 years respectively. Isn’t it time for the UK to follow suit and go one step further by banning expiry dates on gift cards altogether. After all, the lack of expiry dates on the previous system of gift vouchers never caused a problem.