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Gift cards: the gift that can stop giving

Gift card in hands

Gift cards and vouchers are offered by all manner of retailers, providing an easy gift option for some. But as your consumer rights on gift cards are severely limited, should you consider other options instead?

At this time of year, you might have given gift cards to family members who are awkward to buy for, rather than wasting your cash trawling the shops for something they probably might not have liked.

But then, this doesn’t always work out. I don’t mean to sound ungrateful, but I was once given a card for a store that really wasn’t my cup of tea. Needless to say the card expired in my wallet and ended up in the bin, leaving the retailer quids-in. However, the kind person who sent it to me was in the unhappy position of having spent out on something I didn’t benefit from.

The tides are turning…

So aside from my personal gripes; the real, burning issue with gift cards is that there’s next to no consumer protection on them. They aren’t covered by existing legislation, so if you have a gift card for a company that’s slipping into the abyss, the only thing you can do is spend the balance before they disappear (if they’ll even still accept them).

And the high street is clearly going through a huge amount of change. As more of us get savvy about shopping and use the internet to search out the best deals, traditional high-street retailers are suffering. You only have to look to the collapse of Game, JJB Sports, Zavvi, Peacocks and Comet to see this in action – and now the knives are out for HMV too.

Gift cards vs cash

These stores were among the first to shout about their gift cards, offering an easy way for customers to buy a gift that allowed the recipient to purchase something they’d actually want. But as more retailers are closing their doors, more and more gift card holders are getting left out in the cold.

The major benefit of gift cards – that they’re potentially a more thoughtful alternative to giving cash – can be overshadowed by the potential problems you face if your retailer goes bust. But if you do prefer to buy gift cards, you can try to spread the risk by buying cards that can be used across multiple retailers.

Did you buy anyone gift cards for Christmas this year? Or do you tend to avoid them in case the retailer goes bust?

Did you give or receive a gift card/voucher this Christmas?

No (51%, 127 Votes)

Yes (49%, 121 Votes)

Total Voters: 252

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Comments
Member

As I see if there are only ac ouple of ways forward for personal gift cards/vouchers.
1) Give them 100% protection in the event of a collapse, this will require a law change
2) Ban them out right.

For corporately bought vouchers then
1) Change the law so that the distributing/administering company is also liable to them in the event of a collapse
plus 1 and 2 above

By corporatley bought vouchers, I’m referring to those vouchers bought through 3rd parties and not directly from the issuing company, as these 3rd party companies will be buying in bulk and will be 1) getting discounts and 2) paying invoices and not up front.

Remember B&Q, Comet and Woolworths vouchers ? Well they were actually administered by Woolworths, so once they started having problems neither B&Q or comet would accept them, Luckily Woolworths still did.

Ah what the heck, just ban them. Its by far the simplest solution.

It won’t be long before cashback owed when a company folds will be viewed as the next scandal, I personally am surprised we’re not hearing more of this.

Member

Jessops has gone into administration, lets see when cashback owed is stopped. I’ve just email one cashback site as they’re still offering cashback at Jessops, although the Jessops website has now stopped accepting orders, yet they still advertise their vouchers/gift cards.

Member

Thanks William, for everyone else here’s our latest Jessop’s Conversation: https://conversation.which.co.uk/technology/jessops-goes-into-administration-bust-your-rights/

Frustrating to still see them listing gift cards.

Member

If you give vouchers 100% protection, where does that leave us? Who’s pay for it? If all the retailers in the country who offer vouchers have these protected, the public will pay one way or another. Better to ban them.

Member

100% protection is simple. If you buy £100 gift card/voucher, the company has to “bank” it in a separate protected account, until the voucher has been spent, or such time as the money needs to be exchanged for the now worthless gift card. And the company will of course be making interest on all this money, so don’t feel too sorry for them.

Member

Easier still – give money not gift cards – its far more flexible and a lot safer.

Member

I used to give vouchers and cards but now give cheques, or money to those too young to have a bank account. Flexible, safe and well received.

Member

FYI play.com to stop selling items itself and just be a “marketplace” so I guess its time to use play.com vouchers before its too late.

http://www.dailymail.co.uk/money/bills/article-2259559/Play-com-shut-retail-business.html

Member

Sadly, I think we may see some more over the next week.

Member
Nathan Few says:
27 October 2014

The company gift-heaven.co.uk has apparently gone bust. I brought a driving experience from them for my dads 50th birthday. How can I go about claiming the money back? Or what can I do???? If anything

Member

What was the value and did you pay with a credit card?

Member
Nathan Few says:
27 October 2014

I paid roughly £150 and paid by debit card

Member

If you paid using your credit card you would have been protected as the transaction was over £100. You do not get that protection using a debit card but you should contact the card company and ask if they are able to help you get your money back. Also, check back here again as a Which? money expert or someone else with a similar problem may be able to help you.