Who doesn’t love a gift card? They’re a wonderful way of giving a friend or family the fun of picking exactly the present they want— and cutting down on unwanted gifts. So it’s no surprise that 80% of gifters bought them last Christmas*. But with so many high-street stores closing down over the last couple of years and the country now gripped by recession with the possibility of more closures, are they still a safe option?
Gail Cohen, director general of the Gift Card and Voucher Association (GCVA) says: 'This year we can see that people are once again turning to gift cards, this time to manage spending and prevent unwanted gifts in the midst of the current cost-of-living crisis. Gift cards enable people to stick to a strict budget and avoid price inflation on physical gifts which is a key consideration for the 44% of consumers planning to reduce their spending this festive season.'
The GCVA research shows that 80% of UK adults would be happy to receive a gift card this Christmas and 23% of shoppers intend to purchase more gift cards this year to cut costs.
'When it comes to using gift cards, our guidance for consumers is always to spend them as soon as possible. They’re not a gift for the bottom drawer and can be a perfect way to treat yourself in the new year,' says Gail.
But, one of the major issues with a gift card is that it usually becomes worthless if the retailer goes bust before you’ve had a chance to use it. So the advice is always to spend it as soon as possible. Helen Dewdney, founder of consumer rights service The Complaining Cow says: ‘Many have a limited time period on them. So, get it spent! This is particularly important with so many retailers going into liquidation. If a retailer does, it is very unlikely you will be able to use your gift card. The administrators will decide. But you are better off just getting it spent.’
Dean Dunham consumer lawyer says: ‘Shop safe at Christmas: pay by credit card... if you buy a gift card, purchase one which can be used with multiple retailers.’
We've put together a guide to buying and using gifts cards so that your purchase is protected and the recipient can use their gift without any hassle.
DO: pay by credit card
If you’re buying a gift card with a value of more than £100, pay on a credit card. If the retailer you buy from goes bankrupt, your card provider will be jointly liable for your purchase under Section 75 of the Consumer Credit Act, which means you’ll have a better chance of getting your money back.
If you bought a gift card from a retailer that later went bust using your debit card, you can contact your bank and make a Chargeback claim within 120 days.
DON'T: forget to do your research
The friend who goes to the same coffee shop near work, or the aunt that visits a local garden centre every week may appreciate a gift card for that business. But before buying a voucher, do a quick online search and keep an eye on the news to check there are no imminent signs that the business is in difficulty.
DO: buy gift cards that can be used online
To make life easier for the recipient, opt for a gift card that can be used both in store and online. Most gift cards have this option nowadays, but it's still important to check the terms and conditions — you don’t want to buy your friend a voucher only to find out they have to drive 20 miles to use it.
DON'T: limit your spender to one store
Why give someone one option when you can give them many? Buying a gift card that can be used at multiple stores means that even if businesses go into administration, your loved one will still end up with a present they love. This is also a handy gift when you don’t know the person very well.
One4all vouchers can be used online or at thousands of stores as well as restaurants, charities and even pet shops. They also offer themed gift cards such as gamers’ favourites, beauty & spa favourites and teen favourites that can be used at retailers that will appeal to these groups.
National Book Tokens are valid in bookshops across the UK, including Waterstones. You can even send an e-gift card if you are a last-minute shopper! The same applies with National Garden Gift Vouchers, which are taken at garden centres across the country and available to send by evouchers.
DO: think outside the box
Gifting cash is a safe bet. However, if you’re buying for a child or teenager, ask their parents if they have a Junior ISA. Anyone can pay into an ISA; all you need are the account details. Plus, they'll thank you later for investing in their future!
Tip: It’s easy for gifts that whizz straight into an account to get forgotten about on the big day, give the recipient/parent/guardian an eye-catching card with the details of your gift in.
DON'T: ignore expiry dates
How long a gift card can vary enormously. Check whether it’s by a specific date or three months or a year or more when you purchase. It's a good idea to let your recipient know how much time they have to shop. Ireland have introduced a 5-year minimum expiry date for all vouchers sold after December 2nd 2019, but if you're in the UK, you'll have to check how long your recipient has to avoid your present ending up in the bin.
If the voucher is for an experience, check whether you just have to book before the expiry date or actually take the experience. It’s also worth checking whether you can extend the life of the voucher if you need to (this may incur a small fee). Use Resolver to contact the retailer – although they’re under no obligation to extend gift card/voucher, they may do as a gesture of goodwill.
A few gift cards have no expiration date: the Apple Store, Disney and Starbucks are a few of the retailers that offer this freedom.
DO: gift an experience
For some people, a great memory is more valuable than a material item, so why not give them the gift of an unforgettable day. Make sure you have checked that the nearest opportunity for them to cash in their voucher isn’t miles away from where they live.
Virgin Experience Days offer a range of activities from afternoon tea at Fortnum & Mason to online experiences such as Photoshop or cooking courses. The person receiving the voucher will be able to activate it online and book a date and time that is convenient for them. Most vouchers will be valid for a year and must be used within this time.
Buyagift also offer experience vouchers such as a two-night hotel getaway or a super car driving experience. They have days out all across the UK and the recipient can usually choose the location themselves. There are vouchers to suit all budgets from £10 money off to vouchers for full gift experience packages up £250, can either be sent in the post or emailed directly to an email inbox.
Theatre Tokens can be used in more than 270 theatres nationwide, including the West end. They have no expiry date.
Tip: if you have requested a physical voucher or gift card to arrive through the post, bear in mind the postal strike dates and factor these in. Follow the Royal Mail updates.
What if the retailer goes bust?
Anyone who holds a gift card for that retailer will be considered a credit and will need to make a claim in writing to the administrators. ‘You’ll then be placed in a queue along with other creditors. You will, however, be placed low on the list of creditors – it’s fairly unlikely you’ll get your money back,’ according to Resolver, consumer complaints website.
It’s worth checking if there is still time to spend your card as sometimes the administrators ensure that vouchers/gift cards are honoured. Similarly, if the retailer is being bought by another, it may honour existing gift card holders.
The GCVA has a useful Top Tips guide which outlines how people can make the most of gift cards, whether buying or receiving them this Christmas.
*GVCA, survey: Global Data, 2,000 adults, 2022.
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