When a major retailer goes bust, things can quickly become complicated for gift cards. Cash may feel impersonal for a last-minute present, but is a gift card worth the risk?
The past 25 years have seen household names such as Woolworths and BHS disappear, but the rise of online marketplaces such as eBay, Amazon and Etsy means finding a diamond deal at a bargain price is not only confined to car boot sales.
And this year hasn’t been short of tumult for the high street, with four big-name retailers going into administration and others taking out company voluntary arrangements (CVA) to stay afloat.
Toys ‘R’ Us, House of Fraser, Maplin and Poundworld all went bust this year, with major department store House of Fraser the only one to be swiftly bought out of administration by Sports Direct owner Mike Ashley.
And gift cards became a hot topic as a result. Many House of Fraser customers were left wondering whether they could use their gift cards.
‘Difficult to impossible to redeem’
It’s usually anywhere from difficult to impossible to redeem gift cards and vouchers when a retailer goes into administration.
This is because your gift card purchase remains the liability of the old administration that has gone bust. It is a voluntary goodwill gesture for retailers who have gone bust to honour gift cards, and it is not common for them to offer this.
So it was a surprise to hear House of Fraser instructing its customers to send gift cards to its Baker Street office to be re-issued. While it has taken a long time to get these reissued, in recent months people have started to receive gift card replacements.
One in three Which? members we spoke to plan to buy a gift card as a Christmas present this year.
Our buying tips
Here are our handy tips for giving and receiving gift cards:
- – Clarify with the retailer when the gift card runs out at the point of purchase
- – Tell the recipient about the expiry date and any other important terms in person, as not all gift cards have the expiry date printed on them
- – If you are the recipient of a gift voucher this Christmas, look at the expiry date or ask about when it expires as soon as you receive it
Are you considering buying a gift card this year? Have you ever been caught out by a gift card expiring or being rendered invalid?