Buying gift vouchers as Christmas presents? Watch out for these small print tricks

CHRISTMAS is approaching rapidly and for many a gift card will be at the bottom of their stocking come December 25.

The cards or vouchers, either in plastic, paper or digital form, are default present for hard to buy for people.

The industry is now worth £5.6billion but in recent years there have been some well-known problems after big firms have gone bust leaving thousands of shoppers out of pocket.

Typically, the moment a company is placed in administration, stores either stop accepting gift vouchers as payment or place restrictions on their use.

For example, when HMV went into administration in January 2013 the company stopped accepting gift cards before having to later back track.

It was the same situation in November 2012 when Comet went out of business.

When BHS went into administration last April it decided to accept gift cards - but only as part payment for items, meaning shoppers still have to spend cash.

More recently, administrators for defunct fashion chain American Apparel have announced the company’s 13 UK stores will no longer accept gift cards from customers.

Watch out for short-term expiry dates

But it’s not just customers of bust companies who have to worry their vouchers are worthless. Gift cards and vouchers are only valid for a set time period, as little as six months in one case, before they expire.

Figures from the UK Gift Card and Voucher Association (UKGCVA) show retailers pocket about £300m a year from unspent gift vouchers.

High end department store Harvey Nichols gives customers just six months to spend gift vouchers before they become worthless, although its gift cards are redeemable for two years.

Ticketmaster, Hamleys, Virgin Experience Days, JD Sports and Westfield shopping centres all give customers just one year before vouchers are cancelled with the retailer keeping the cash.

Debenhams, M&S, Currys, Sports Direct and House of Fraser all offer two years before cards and vouchers become worthless.

Only a handful of retailers, including Ikea and Amazon, sell gift cards which never expire.

James Daley of Fairer Finance says short expiry dates on gift vouchers are a cynical way for shops to profit at customers’ expense.

He said: “It’s particularly galling for the people who gave the gift. After all, it wasn’t their intention to make a donation to the retailer. Given that the retailer already has the money in its coffers, there is no good reason why gift cards should ever expire.”

“I’d like to see protection for gift card holders, putting them at the top of the list of creditors when a company goes bust. And there should also be a ban on gift card expiry dates – or at the very least a lengthy minimum of five or 10 years.”

Any expiry date will be written on a gift voucher or card but consumers need to check retailers’ website for other terms and conditions.

Don't get caught out by the small print

You’re unlikely to get change in cash from any gift voucher while some also come with restrictions about what they can be spent on. For example, Selfridges vouchers can’t be spent in stores’ Apple concessions while House of Fraser vouchers can’t be used to purchase certain items including large kitchen appliances.

Victoria Leyton, spokesperson for shopping website VoucherCodes.co.uk, says gift cards might seem like the perfect Christmas present but it’s worth remembering that they don’t work exactly like cash.

She said:“It’s important to fully investigate whether there is any expiration date, or restriction on how the vouchers can be spent – in one purchase, or over several like a debit card – and flag that up to the recipient upon giving to avoid disappointment at a later date,” she says.

We pay for your stories! Do you have a story for The Sun Online news team? Email us at tips@the-sun.co.uk or call 0207 782 4368