Martin Lewis issues warning about popular Christmas gift as they could become worthless
MONEY-SAVING expert Martin Lewis has issued a warning over a popular Christmas present that could become worthless.
The consumer champion urged shoppers to be wary of buying gift cards ahead of the festive period.
There's no guarantee you can use a gift card if a retailer goes bust, so you could lose money.
Not only this, but gift cards occasionally have expiry dates meaning there's a time frame on using them.
Instead, Martin urged shoppers in to gift cash or make a simple bank transfer.
He said: "If the store goes bust, gift vouchers usually become worthless.
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"Plus some have expiry dates. So think carefully about the likely financial strength of the firm, and how quickly they'll be used, before you do it."
The fresh warning comes after Which? told customers to be wary of buying gift cards last Christmas.
The consumer website said one in ten who had received a gift card in the preceding two years did so from companies that went bust.
And a survey of 2,000 shoppers found that 7% received one for a retailer that had collapsed since March 2020.
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One in five of those which had vouchers for a collapsed store had a gift card for the Arcadia Group, which owned, among other retailers, Burton and Dorothy Perkins.
But the group went bust in November 2020, putting 13,000 jobs at risk.
Some of the retailers, including Topshop and Miss Selfridge, only let customers pay for 50% of their order total using gift card credit.
The other half had to be funded by the shoppers themselves.
Your rights if a retailer collapses
If you've bought a gift card from a retailer that ends up going bust, it might be a struggle getting your money back.
When a company collapses, administrators are brought in to take control of its day-to-day running and to try and rescue it from going bust.
But administrators view customers with gift cards as creditors which means you're not automatically entitled to a refund on one.
Either way, if you have a gift card, you should go to the shop and see if you can still use it as some administrators honour the purchase.
Failing this, you'll need to make a claim in writing to them with proof of buying the voucher.
This might be the date the gift card was bought or a receipt.
If you've got a unique gift card number make sure you include that too.
If the gift card was purchased through a third party, you could also approach that business for a refund.
You won't be entitled to a refund but they might, at their discretion, still pay you.
Beyond this, you could make a claim under Section 75 rules in the Consumer Credit Act.
But you will only be able to use this method if the gift card was bought with a credit card and is worth more than £100.
For any vouchers under this amount you could make a claim under Chargeback rules to your credit or debit card provider.
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It is a way for your card provider to reclaim money from the retailer's bank.
But there's no guarantee this will end in a refund.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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