Money Mat­ters

The Oldie - - CONTENTS - Mar­garet Dibben

By set­tling for gift cards, you avoid the stress of find­ing the per­fect Christ­mas present while sus­pect­ing you will get it wrong. That is the up­side. The down­side is that you could be throw­ing money down the drain.

Peo­ple hold­ing House of Fraser gift cards, some worth hun­dreds of pounds, wor­ried for months that their cards were worth­less after Sports Di­rect bought the com­pany. Sports Di­rect had no le­gal li­a­bil­ity to hon­our the cards but even­tu­ally cus­tomers were promised full-value re­place­ment e-vouch­ers. These can be spent only on the House of Fraser web­site and must be used by the end of Jan­uary.

The gift card mar­ket is worth £6 bil­lion a year. With the frag­ile state of many high-street re­tail­ers, more gift cards could, overnight, be­come worth­less.

When you shop with cash or bank cards, you carry the items away and your pur­chase is safe. With gift cards, you hand over money in ad­vance, trust­ing that the store will give you goods in re­turn at a later date. Your money is not ring-fenced to se­cure it against bank­ruptcy, nor is it sup­ported by any con­sumer pro­tec­tion scheme.

Even when the shop where you want to spend a gift card is still in busi­ness, there are draw­backs. Un­like cash, nearly all gift cards and vouch­ers have an ex­piry date, usu­ally 12 or 24 months, though

some last longer. The cut-off date is not al­ways made clear; yet, after the card ex­pires, the com­pany keeps your money. If you are stuck with an out-of-date card, ap­peal to the com­pany for an ex­ten­sion. Some will reval­i­date old cards.

Gift cards are mostly is­sued by stores – which re­stricts your choice of where to spend them. There is, though, a move to ex­pand the choice of out­lets and pro­vide pro­tec­tion against any one shop dis­ap­pear­ing.

Some towns and cities, in­clud­ing Bath, Glas­gow, Sal­is­bury and Cardiff, now sell gift cards that can be used in dozens of their lo­cal re­tail­ers, restau­rants, super­mar­kets and depart­ment stores.

The One4all multi-store card en­ables you to shop in dozens of dif­fer­ent places around the coun­try but has a sneaky penalty charge. If you have not used the card after 18 months, it takes 90p from the bal­ance ev­ery month un­til noth­ing is left.

If Sports Di­rect had failed to hon­our the House of Fraser cards, pur­chasers would have had to join the queue of un­se­cured cred­i­tors with lit­tle hope of see­ing their money again.

Any­one in this sit­u­a­tion who bought a gift card for more than £100 and paid by credit card can claim a re­fund from their bank un­der the Sec­tion 75 rule.

If they used a debit card, they should ask their bank for money back un­der the charge­back rules, although suc­cess is not guar­an­teed. In both cases, only the per­son who bought the gift card, not the re­cip­i­ent, can claim. If you are the sort of per­son who fin­ishes your Christ­mas shop­ping in Oc­to­ber, be aware that the gift card will al­ready have lost two months of its shelf life be­fore the ben­e­fi­ciary re­ceives it.

If you are given a gift card this Christ­mas, be sure to spend it as quickly as you can.

‘I'm very pleased with Fred's hip re­place­ment'

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.