Are gift vouchers safe?

With just five weeks until Christmas, festive preparations are gaining momentum and many of us will already be scouring the shops for gifts for family and friends. But there is always that one fussy relative that is difficult to buy for – who, in previous years, you may have considered buying a gift voucher.

Gift voucher being used on an ipad

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However, if you have either purchased or received a gift voucher for electrical store, Comet – which went into administration earlier this month – you may now have cause to think twice.

The store had initially refused to accept gift vouchers at all but, under pressure, conceded that it would honour vouchers bought by consumers but not by corporate companies, such as insurers. In other words, you could still lose out.

The debacle has given lots of people cold feet about gift vouchers as Christmas presents according to a recent poll we ran on MoneySupermarket.  It found that over a quarter of respondents (25.5%) said they would now avoid vouchers and give money instead, while a further 29.5% stated that they would only buy gift vouchers from retailers they had faith in. A mere 10.2% said they would continue to buy gift vouchers as presents for Christmas this year.

But what exactly are your rights when it comes to using gift vouchers? We take a look.

“The store my voucher is from has gone bust – can I still use it?”

Gift vouchers or cards from retailers are largely unregulated by the city watchdog, the Financial Services Authority (FSA). And, frustratingly, this means it is down to the discretion of the administrator whether or not a store honours its customers’ gift vouchers – even if they are still trading.

MoneySupermarket’s travel editor, Cathy Toogood has unfortunately been on the receiving end of this situation.  She had Comet vouchers issued to her from her insurer, Halifax, following a break-in. But, as mentioned above, because the vouchers were issued from a corporate company, they are currently not being accepted. All Cathy can do now is to wait for new vouchers for a different store to arrive. 

She said: “I know it isn’t the fault of Halifax or Comet. However after being burgled it feels like yet another thing for us to deal with.

While I am only waiting for vouchers to buy a replacement sat-nav, I know other people may have more essential items they need to purchase.”

However, there are some circumstances under which you may be able to recoup your money regardless. Clare Francis, our head of content at MoneySupermarket offered this advice: “If the voucher is worth £100 or more and was paid for using a credit card there is a chance that you may be able to get the money back from the credit card provider under Section 75 of the Consumer Credit Act.

“However, there is no guarantee as this is a grey area of the law because strictly speaking you have received the ‘goods’ you paid for ie, the voucher. It’s worth a try though as it doesn’t cost anything to make such a claim.”

For more information on what to do if a company goes bust read Clare Francis’ article:

“My vouchers have expired – is there anything I can do?”

While appreciated, gift vouchers received as presents can be too easy to forget about – they are often tidied away and retrieved months later – often only to find that the expiry date has passed and they are no longer valid.

All stores vary in whether or not they impose an expiry date on vouchers – as well as the length of it – so it’s important you check the terms and conditions of your gift card to avoid getting caught out.

For example, Selfridges’ gift cards expire after a year of inactivity, Debenhams and M&S vouchers are valid for 24 months, while retailers such as Ikea and John Lewis don’t impose an expiry date at all.

Trading Standards offers consumers this advice:  “When gift cards or vouchers have expired a trader does not have to accept them. 

Therefore, any consumer who receives a gift card/voucher must ensure they spend them within the time limit specified in their terms and conditions.”

However, it adds: “If consumers find they have a gift card they have not spent within the time limit it is still always worthwhile asking a trader if they will accept them out of goodwill.”

So, as is the case when a company goes bust there is no hard and fast rule. But prevention is better than cure so, to avoid this, make a point of checking the expiry date when you give or receive gift vouchers. Then mark it on your calendar or put a reminder on your phone.

“I have lost my vouchers!”

If you have lost your vouchers or had them stolen, stores are unlikely to accept liability. Most retailers will tell you to treat your vouchers like cash and, as they do not know who the recipient was, stolen vouchers could quite easily be used. Therefore, be vigilant when you receive gift cards and vouchers and ensure that you keep them safe.

“So – are vouchers safe or should I avoid them all together?”

Despite these potential pitfalls, the gift voucher has come a long way since its humble beginnings. No longer just being issued by stores, there are a whole variety of vouchers you can buy, making them a great option if you are stuck for ideas for your nearest and dearest.

Just a small selection of the options out there include spa days, extreme sports, restaurants, days out, driving lessons and theatre and concert vouchers.

There are also multi-store gift cards that would allow the recipient to shop at a number of stores, therefore removing concerns about what would happen if one of the retailers went bust. Just be aware of your rights when you purchase gift cards, know about the things that can go wrong, and choose where you buy your vouchers from wisely.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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