Gift card warning to Christmas shoppers

Christmas shoppers in the North East need to make sure they understand the risks of buying gift cards for family and friends, a financial expert has warned.

Alexandra Withers, the regional chair of insolvency and restructuring trade body R3, has warned that people could lose their money if a retailer becomes insolvent.

She says that in several previous instances, retailers that have gone into administration or liquidation have been unable to honour gift cards which were been bought before it happened and – with a number of well-known stores entering insolvency during 2020, and others facing severe trading difficulties – shoppers should to do all they can to not leave themselves open to losing their money.

She said: “While gift cards are convenient and can be easily bought, both in stores and online, it is really important for consumers to make sure they understand the risks of using them as they aren’t without their downsides.

"Customers with gift cards or vouchers from any retailer which enters insolvency and is either continuing to trade, or has gone through a pre-pack administration, must check with store staff whether they can still redeem them."

Ms Withers, an associ - ate solicitor in insolvency in Newcastle, added: “It is u n d e r s t a n d ab l y f r u s trati n g wh e n a reta i l e r wo n’ t accept gift cards during an insolvency process, but the insolvency practitioners in c h a rge o f th e p ro c e s s a re obliged to look after all creditors’ interests according to a strict hierarchy set out in law, and unfortunately customers are just one of many.”