I checked the terms and conditions and was surprised to find the gift card had to be used within 12 months. This short expiry period seemed stingy and reminded me of the pitfalls of sending vouchers as birthday or Christmas gifts.
While a gift card might seem ideal for those hard-to-buy-for relatives, they often come with hidden risks and unexpected T&Cs that could catch you out.
Here, we uncover four things to watch out for if you receive a gift card this Christmas.
1. Short expiry dates
Expiry dates are one of the biggest traps when it comes to gift cards.
In some countries, there are rules around unfair expiry periods. Gift cards in Ireland, for example, must be valid for at least five years (or not expire at all). But in the UK, there are no such regulations, leaving you at the mercy of individual retailer policies.
Our snapshot investigation looked at terms and conditions across a range of high street retailers, including coffee shops, supermarkets, entertainment venues and fashion and home stores.
We found that most retailers offer at least two years before a card expires.
However, some impose much tighter deadlines. Retailers with shorter expiry periods include B&M, Costa Coffee, Vue cinemas, and Ticketmaster, which have an initial expiry date of 12 months (although you can extend the Vue expiry date by doing a balance enquiry).
On the other hand, some gift cards come with no expiry date at all, which gives recipients more time and flexibility to redeem their present. These include gift cards from the Apple Store, Starbucks, Theatre Tokens, and National Book Tokens.
It’s also important to check when the expiry clock starts ticking. Some cards begin counting down from the purchase date, while others reset their validity every time you check the balance or make a transaction, giving you more time.
To avoid losing out you should set a reminder in your calendar when you receive one and aim to use it well before the expiry date.
Find out more:2. Restrictions on how you can spend vouchers
Not all gift cards offer the same flexibility, so it’s worth checking where and how they can be used.
Some can only be redeemed in-store, while others are restricted to online purchases. These limitations can catch recipients out, especially if their preferred way to shop isn’t covered.
Another common frustration is the inability to split payments. Some gift cards require the balance to cover the entire cost of an item, making leftover funds difficult to spend or preventing purchases that exceed the card’s value.
When we asked Which? members about their experiences with gift cards, several respondents highlighted these issues. One described their experience with a One4all gift card: ‘They say it can be used online, but only if the item costs less than the credit on the card.’
This is because the One4all gift card operates the same way as a prepaid Visa debit card, and most online stores don’t allow multiple payment methods. As a result, the total value of your basket must be equal to or less than the card’s balance. However, One4all states that split payments should be possible when used in-store.
3. Unexpected fees
Although most retailers do not charge extra fees, some gift cards can quietly lose value over time due to inactivity charges. These fees, while uncommon, can catch you out if you’re not aware of the terms.
For example, One4all gift cards, which are accepted at multiple retailers, impose a 90p monthly fee after 18 months of inactivity. This means that if the card isn’t used promptly, its balance will gradually diminish.
Other fees we spotted with One4all included a card replacement fee of £5 if your gift card is lost or stolen, and a redemption fee of £7.50 – charged if you decide to redeem the value of the gift card balance into your account.
One4all told us that a small monthly charge is incurred to cover the operational costs of processing gift cards, which aren't covered if vouchers aren't spent. It said the majority of cards are spent within three to six months, so most customer never face these charges.
It added: 'For the small minority of card holders who have had charges applied to their card before they had the opportunity to spend it, One4all operates a "no quibble" policy. We encourage those card holders to get in touch with us and we will be happy to resolve this to your satisfaction.'
It’s worth paying close attention to the terms before buying or using a gift card. Searching the retailer’s terms and conditions online and using Ctrl+F to look for 'fee' can quickly highlight any potential charges to be aware of.
4. Spend quickly if the retailer goes bust
This year alone, several retailers have gone into administration. When a retailer collapses, gift card holders are often left in limbo.
If a company goes bust, administrators decide whether to honour gift cards, but even if they do, it’s often for a limited time or under restrictions.
For example, when the Arcadia Group, which owned brands like Topshop and Miss Selfridge, went into administration in December 2020, it only allowed customers to pay for 50% of their order totals using gift card credit with certain retailers.
A survey of Which? members in October 2021 found that two in five consumers with gift cards for retailers that went bust were unable to use the full balance, losing an average of £25 per voucher.
Find out moreThoughtful alternatives to gift cards
Gift cards might seem like an easy choice, but they’re not your only option for a meaningful gift. If you want to avoid the potential pitfalls of terms and conditions, there are plenty of alternatives to consider.
And if you’re worried that cash feels impersonal, why not add a handwritten card or note to explain how you hope they’ll use it?
*We surveyed 1266 Which? Members in August to ask them about their experiences using gift cards.
source https://www.which.co.uk/news/article/gift-cards-watch-out-for-these-sneaky-terms-and-conditions-this-christmas-a20GZ6p3BPnZ