THE £300M CHRISTMAS GIFT CARD RIP-OFFS
Shoppers fleeced by major stores charging massive hidden fees on festive vouchers
HIGH street stores are pocketing more than £ 300 million a year from unspent cash on Christmas gift cards.
Shoppers are failing to cash in this small fortune after being caught out by baffling small print and hidden f ees and charges which eat into the money on their cards.
In some cases, gift cards take 90p a month if they have not been used for a certain period. In others, the entire balance can be snatched, or shoppers are forced to spend £5 to get a new card.
Even big name stores are making it impossible for recipients to find out when their gift card expires.
In the worst cases, shoppers are not allowed to use their card because the store it is for has gone bust. It means
thousands of cards given by grandparents, aunts and uncles as a Christmas present will never get used.
Instead of the money going to their loved one, it simply ends up in the coffers of the store that sold it.
Alex Johnstone, Tory MSP for North-East Scotland, said: ‘Customers are getting ripped off.
‘Some leniency on the part of retailers would provide a better service and improve their own reputation.’
Gift cards are big business for high street stores, with £5billion worth sold a year, mostly at Christmas.
Some cards are run by shops such as John Lewis and House of Fraser but others are schemes which allow the recipients to spend the money in a number of stores, such as Love2shop, which can be bought online at highstreetvouchers.com and used at stores including Argos and Boots.
On the face of it, the cards seem simple: all the recipient has to do is spend it at the shop where it is valid.
But £6 in every £100 put on them goes unspent, largely because of con-
‘Customers are getting ripped off’
fusing terms and conditions. Many cards expire if not used for two years and after this the money is lost.
However, gift cards sold by many major shopping centres expire after 12 months. Argos allows customers three years to spend gift cards, while Amazon and John Lewis vouchers have no expiry date.
One 4 All cards – which are available to buy at the Post Office and can be used in 98 stores including Debenhams, John Lewis and Waterstones – similarly don’t have an expiry date.
However, there is a catch with this offer: if not used for 18 months a monthly charge of 90p is applied. This means £20 left for two-and-ahalf years will be worth only £9.20.
James Daley, managing director of consumer website Fairer Finance, says: ‘There is no good reason for gift cards to have such baffling terms and conditions. It’s just a way for shops to bump up their profits.
‘Companies are already benefiting from customers who don’t use their gift cards straight away as, thanks to inflation, they will get less for their money if they wait years to spend them. There is no need to squeeze even more out of people, especially at Christmas.’
Each store has its own terms and conditions which restrict how gift cards can be used. Argos and Halfords do not allow customers to spend their gift card online.
A final problem for consumers is when a store goes bust. In the past five years 238 retailers have gone into administration, including household names Comet and JJB Sports.
In this situation, stores have no legal obligation to honour gift cards.
And there is no protection for shoppers with gift cards. Money on them is classified as e-money, so if the cash goes missing they cannot make a claim from the Financial Services Compensation Scheme.
Andrew Johnson, director general of the UK Gift Card and Voucher Association, claimed gift cards going to waste is not just bad news for customers.
He said: ‘Shoppers spend an average of 40 per cent more than the value of their voucher, so it’s big money businesses are losing out on if customers don’t use them.’