STOP XMAS GIFT CARDS RIP-OFF £300 million worth expire before they’re used
SHOPS are being warned to end their £300million gift card rip-off.
Customers are being shortchanged because some cards expire within just six months.
Others carry hidden fees that quickly make them worthless. The Government is seeking a minimum two-year expiry period and fairer terms and conditions. Often cards do not even carry use-by dates.
Industry data shows that £5.40 of every £100 put on gift cards is never spent – handing retailers a windfall of almost £6million a week.
A Mail investigation found that stores have a huge range of different policies, meaning many customers try to use their cards only to find they have expired.
Guy Anker, of the website Money Saving Expert, said: ‘Gift cards are risky. If a firm goes under, you lose your money. But, on top of this, it can be incredibly difficult to find out when a gift card expires.
‘The end date is often hidden and many people wind up losing their money. Any card that expires in
under a year is not long enough.’ Habitat, White Stuff, French Connection, Costa and Ticketmaster gift cards expire at one year. M&S, Reiss, Lakeland, House of Fraser, Fat Face and Body Shop set a limit of two years, Zara offers three years and Ikea, iTunes and Starbucks have no expiry date at all.
Lord Foster, Liberal Democrat business spokesman, said stores should scrap useby dates completely. ‘Hidden and confusing expiry dates on gift cards mean millions of people risk being caught out again this Christmas,’ he said.
‘Scrapping these unfair rules would be a welcome gift from stores to their customers. In the long term, the Government must step in and introduce a two-year minimum rule so everyone knows where they stand.’
Shoppers can also be caught out by hidden fees. One 4 All cards, which can be used with more than 100 retailers including Debenhams, M&S, House of Fraser, Gap and H&M and Waterstones, do not expire.
But after 18 months, a 90p charge is applied each month. A £10 gift becomes worthless within two and a half years. Spa vouchers are often valid for only six months. The Department of Business, Energy and Industrial Strategy is discussing the issues with the UK Gift Card and Voucher Association.
A spokesman said: ‘We have worked with businesses to encourage expiry dates of at least two years for gift cards and to increase transparency about any small print that consumers could miss.’ The spokesman said many stores were moving to a two-year minimum. The Government fell short of proposing legislation – as Ireland did last year. Instead it is hoping retailers will sign up to a voluntary code.
Officials are still considering whether customers should be protected when a retailer issuing gift cards goes bust as happened with Borders bookshop, Woolworths, Jessops, JJB Sports, Austin Reed and HMV.
The gift card association says each card is logged and tracked on computer systems – causing administrative expense.
Retailers also say that allowing gift cards to sit on their books could cause accountancy problems if there were a run of redemptions.
The association has so far refused to bow to pressure to introduce a two-year minimum term for gift cards as part of its voluntary code for stores.
Its director Gail Cohen said: ‘The UKGCVA continues to work with its members, the industry and BEIS, to develop best practice guidelines with regards to gift card expiry dates. One of our priorities is to help issuers give the correct information to consumers, and we encourage our members to have complete transparency of gift card terms and conditions.’