Gift cards might seem like a good option for people who find it hard to buy, but shoppers are warned to think twice before buying.
Consumer champion Which one? revealed that one in 10 gift card recipients in the past two years received cards for retailers that went bankrupt, and 7% received cards for a retailer that collapsed since March 2020. One in five of those who have vouchers for collapsed stores had a gift card for an Arcadia Group retailer like Topshop or Miss Selfridge.
When a retailer goes bankrupt, there is no automatic right to a refund on the card and even if the business is maintained by administrators, there is no guarantee that you will be able to use them if the retailer of the card was to go bankrupt. Topshop and Miss Selfridge only allowed customers to pay for 50% of their order total using a gift card after fell into administrationbuyers having to finance the other half of their purchases with their own money.
Lisa Webb, which one? consumer rights expert, said: “While often a popular choice for hard-to-please friends and family, Which? advises consumers to think twice before buying cards- gifts in this festive season. With the uncertain economic outlook, you could find yourself dry if the business goes bankrupt. If you receive a gift card for Christmas, be sure to check the fine print carefully to find the expiration date, and make sure you don’t face unexpected charges if you don’t spend your voucher quickly.”
Gift card rules and rights can be quite complicated. Here are the main points:
What are your rights if a retailer goes bankrupt?
When a retailer goes bankrupt, administrators consider customers with vouchers as creditors, meaning you’ll be among the company’s other creditors, all trying to collect the money owed. Administrators are required to treat all creditors equally and cannot prioritize one over another. To get your money back, you will need to make a claim in writing to the administrators with proof of your vouchers.
It is worth calling or visiting the store first to check whether the voucher can still be used. Sometimes the administrators of a struggling company will decide to honor gift vouchers and cards.
Another way to get your money back is to make a Claim under Section 75 of the Consumer Credit Act. The buyer can do this if the gift cards or vouchers were purchased on a card and the value of the single purchase was over £100. If the voucher or gift card is less than this amount, you may be able to claim chargeback rules to your credit or debit card provider, but this is not always successful.
What can I do if I have a problem with a gift card I received as a gift?
Your rights are very limited if you were not the purchaser of the card. If you have a problem with this one, you’ll need to tell the person who bought it for you.
What are my rights if I bought the gift card?
The company issuing the voucher must include all material conditions at the point of purchase. Always check the conditions written on the voucher (or the packaging around it) as you will be bound by the conditions known before or at the time of purchase.
If the conditions were not brought to your attention when purchasing the gift voucher – for example, they were hidden on the back of the card or voucher and this could not have been seen because the card was stuck on or wrapped in a wrapper – then you may be able to argue that the terms are against the requirements of good faith, if you run into a problem later. To meet the Good Faith Requirements, the Terms must be designed, negotiated and entered into with you in a fair and open manner.
Are expiry dates allowed?
Yes, as long as you were informed of any expiration date at the time of purchase. So if you’re thinking of gift voucher ideas for someone else, you’ll want to check the expiration date to make sure the recipient of your gift voucher still has enough time to spend it and also get them to take it. knowledge of the expiry date. and other important terms when you offer it to them.
Likewise, if you are the recipient of a gift voucher, you should look at the expiration date as soon as you receive it, so you know how long you have to use it. Pay special attention to vouchers for Experience Days, to make sure it’s clear whether or not you need to book and enjoy the experience before the expiration date printed on your voucher, or whether you just need to book it before the expiration date.
Can I extend a gift voucher?
If the voucher has expired without you realizing it, you may be able to extend it for a fee. You may have trouble getting a free extension unless the buyer can prove that the expiration date terms were unclear to them at the time of purchase.
What in case of loss of a gift card or a voucher?
If you’ve lost your gift certificate, you may be able to get a free reissue via email or a physical replacement for a nominal fee. But gift cards and vouchers are like cash. So if you lose one, you might be out of luck.
Your chances of getting a new gift card will depend on the terms and conditions of the gift certificate and the policy of the retailer. Contact the retailer to ask if they can help you, and be sure to include important information such as the date the gift card was purchased and any proof of purchase.
If you have a record of the unique gift card number, include it when contacting the retailer. If you received the gift certificate or card as a gift, you will need to ask the person who purchased it for you to help you prove this to the retailer.
Can I redeem unwanted vouchers?
If you wish to redeem an unwanted voucher, you will need to check the conditions of the voucher. If it’s a voucher for an experience purchased from a website dedicated to the experience, you may have a better chance of being able to change that than if your gift card is intended to be spent at a specific retailer. You are unlikely to be able to exchange a junk voucher for cash.