Tuesday, 12 November 2013

Gift card for Christmas? It could turn out to be a token gesture

There are only so many pairs of socks or handkerchiefs a man can receive at Christmas and so giving a voucher for a gift is a great idea. Book tokens, iTunes vouchers and gift cards galore are available these days and usually don’t have an expiry date on them which makes them doubly welcome as a present. However, consumers have been warned this year to take care when selecting a voucher for Father Christmas to deliver on the big day. Not because they are heavy in weight and could cause a tipping hazard for the old sleigh and reindeer, but due to some stores going into receivership and the voucher becoming obsolete.

Consumers lose out as retailers go bust

Last year many consumers were out of pocket when Blockbuster, HMV, Comet and Jessops all went into receivership after the Christmas period. It took quite a while but a majority were honoured although, if you buy a gift token, there is no guarantee that it will be the case if the shop goes out of business. It was estimated last year that for those with Jessops vouchers,  in total over half a million pounds worth of tokens were not refunded, or replacements offered.

Consumers who lodged a complaint were told that administrators who look into the books of any store in receivership, are obliged to pay the banks who have lent the business money, staff salaries and administration costs, before they start to look at gift voucher holders. The main protection at the moment seems to be if you pay for your gift token using a credit card and the amount is more than £100, in theory you will be protected by both the retailer and your credit card company.

Keep an eye on the High Street

However, many of us tend to spend smaller amounts in different stores depending on which member of the family or friend we are shopping for, so what else can we do? Keep an eye on what is happening in the High Street is the best advice given at present. Apparently Blockbuster Video are about to call in the administrators again so perhaps another outlet for your shopping should be considered.

Or you could consider your own do it yourself vouchers, such as a free babysitting service for one night, an offer to do the ironing or cook a meal, (you may have noted this was typed as the Significant Other was reading over my shoulder), wash and polish the car, cut the lawn, take the dog for a walk, (I leave the keyboard for a few minutes to put the kettle on and he gets his own back), and many other thoughtful gifts.

There may be some light on the horizon as a recent group of insolvency specialists have reviewed consumer legislation linked to gift cards such extending the Consumer Credit Act for example. Another suggestion could be to make retailers, who offer gift vouchers, take out a form of insurance that would protect the consumer if the firm went out of business. However, until then, just keep a weather eye on the High Street and if you have had a problem with a retailer refusing to honour a gift voucher or token, let us know!

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