Warning to 'think twice' about buying gift cards this Christmas

Consumers have been warned to "think twice" before buying gift cards this Christmas after almost one in 10 received a voucher over the last year for a retailer that has gone bust.

Friday, 12th November 2021, 7:11 am
Updated Friday, 12th November 2021, 7:12 am
Consumers have been warned to "think twice" before buying gift cards this Christmas after almost one in 10 received a voucher over the last year for a retailer that has gone bust. PIC: PA

Which? surveyed 2,000 consumers to find 7% had received a gift card for a retailer that had gone bust since March 2020.

Almost two-fifths (38%) of these consumers were unable to redeem the full balance of their voucher, with an average of £25 left unspent.

One in five (21%) of those with vouchers for bust retailers had a gift card for an Arcadia Group retailer.

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Some of these retailers, including Topshop and Miss Selfridge, only allowed customers to pay for 50% of their order total using gift card credit after they fell into administration after Christmas last year, with shoppers left to fund the other half with their own money.

Which? warned that administrators may refuse gift cards at any point in a bid to save a troubled retailer.

The organisation also found that some retailers are better than others at stating when their gift cards expire.

More than half of those who received a gift card in the past year (53%) had an expiry date clearly stated while a quarter (27%) said the expiry date was not clear on their cards.

The most common reasons respondents gave for not spending a gift card were not getting around to using it (42%) and not finding anything they wanted to spend it on (28%).

Which? consumer rights spokesman Adam French said: "Which? is advising consumers to think twice before buying gift cards this festive season.

"While gift cards might seem like an easy gift for hard-to-please family or friends this Christmas, our research shows you could be left high and dry if the company goes bust.

"If you receive a gift card for Christmas, make sure to carefully check the small print to find the expiry date and make sure you won't face any unexpected charges if you don't spend your voucher quickly."

The Gift Card and Voucher Association said: "Given the economic turmoil of the past year-and-a-half, it's understandable that consumers may be wary. However, gift cards remain the ideal choice for an ever-growing number of shoppers, with the gift card market being worth approximately £7 billion as of the most recent industry valuation.

"Looking ahead, particularly at a time when supply shortages continue to be prevalent, gift cards and vouchers are also often the most convenient and safe option for shoppers looking to avoid disappointment this Christmas, while significantly cutting down on festive waste and unwanted gifts."

Which? surveyed 2,000 UK adults in October.

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