Don’t look a gift horse in the mouth – unless it’s a Topshop voucher

A CONSUMER watchdog has warned Christmas shoppers against purchasing gift cards, after one in fourteen people found themselves with a voucher for a business that had collapsed in the past year.

Which? has warned shoppers of the risks associated with buying retail gift cards in the wake of the pandemic that has seen multiple high-street businesses cease operations.

Philip Green’s Arcadia Group, which owned Topshop, Topman and Miss Selfridge, went into administration in November last year, announcing it would close all of its main stores. The Topshop brand was later bought by the online retailer Asos. The consumer watchdog surveyed 2,000 people to discover issues that consumers were facing with buying and spending gift cards over the past year, finding that 7 per cent (one in 14) people had received a gift card for a retailer that subsequently went bust.

Almost two fifths of these consumers were unable to spend the full balance of their gift card, with an average amount of £25 being left unspent.

Adam French, a consumer rights expert at Which?, said: “Which? is advising consumers to think twice before buying gift cards this festive season. “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.”

Some of the retailers that went bust, including Topshop and Miss Selfridge, only permitted customers to pay for 50 per cent of their order total using gift card credit after they fell into administration, meaning shoppers were left to pay the rest with their own money.

One in five respondents with vouchers for collapsed businesses said they had owned a gift card for an Arcadia Group retailer.

In addition to Green’s fashion empire, Debenhams closed its last remaining stores in May after announcing it had been placed in administration for the second time.

The 242-year-old business, which had struggled with declining sales and footfall for around a decade, stopped accepting gift cards shortly before Christmas last year.

Businesses collapsing are not the only issue consumers face when purchasing gift cards.

A failure to clearly state the voucher’s expiration date has also left some shoppers out of pocket, with Which? finding that a quarter of people say the card’s expiry date is not made clear.

Consumers are reminded to check the small print of their gift cards for any additional fees, as well as the expiry date, as some cards charge an inactivity fee.

One4all, a gift card supplier, charges a monthly charge of 90p if funds are not used after 18 months of owning the card. The company said most regulated gift cards carry inactivity charges and One4all’s charges are amongst the lowest in the market.

The Gift Card and Voucher Association said gift cards cut down on festive waste and unwanted gifts.