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Christmas gift card warning

Written by: Emma Lunn
Which? is warning people to think twice about buying gift cards this Christmas after it found that nearly one in 10 people had received a gift card for a retailer which went bust since the start of the pandemic.

The consumer champion surveyed 2,000 people to find out the issues consumers have experienced with buying and spending gift cards in the past year. It found that an estimated two million people have unused gift cards that they were given in the past year.

Bust retailers

About 7% had received a gift card for a retailer that had gone bust since March 2020. Almost two-fifths (38%) of these consumers were unable to spend the full balance of their voucher – with an average of £25 left unspent.

One in five (21%) of those with vouchers for bust retailers had a gift card for an Arcadia Group retailer. Some of these retailers, including Topshop and Miss Selfridge, only allowed customers to pay for 50% of their order total using gift card credit after they fell into administration after Christmas last year. Shoppers had to fund the other half with their own money.

Administrators may refuse gift cards at any point in a bid to save a troubled retailer. This was the case with Debenhams when administrators decided to stop accepting gift cards just before Christmas 2020. One in eight (13%) survey participants who received a gift card for a retailer that went bust said they had a voucher for the troubled department store in the past year.

Gift card expiry dates

Which?’s research also found that some retailers are better than others at stating when their gift cards expire. More than half (53%) of people who received a gift card in the past year had an expiry date clearly stated while a quarter (27%) said the expiry date was not clear on their cards.

The most common reasons respondents gave for not spending a gift card were not getting around to using it (42%) and not finding anything they wanted to spend it on (28%).

Fees and charges

Along with checking the expiry date, consumers should also check the small print for any additional fees.

Some cards, such as One4all which can be used with multiple retailers, charge an inactivity fee. After 18 months of owning the card, a monthly charge of 90p is deducted from funds remaining until the card balance reaches zero.

Less than one in 10 respondents (8%) in Which?’s survey, who had received and spent a gift card, said they had to pay to register the card or were charged a transaction fee.

Check the small print

For several years before the pandemic, Which? has advised consumers to think twice before buying gift cards and the same advice rings true this festive season. If people receive a gift card this Christmas, they should carefully check the small print to make sure there are not any surprising fees or charges.

Adam French, Which? consumer rights expert, said: “While gift cards might seem like an easy gift for hard-to-please family or friends this Christmas, our research shows you could be left high and dry if the company goes bust.

“If you receive a gift card for Christmas, make sure to carefully check the small print to find the expiry date and make sure you won’t face any unexpected charges if you don’t spend your voucher quickly.”

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