Shoppers warned over giving Christmas gift cards as presents this year
SHOPPERS have been warned not to give gift cards as presents this Christmas.
This is because there's no guarantee that you'll be able to use them if the card's retailer was to go bust.
The advice comes from Which? who is warning shoppers to beware of the risks when purchasing gift cards this Christmas.
According to the consumer champion, one in ten who received gift cards in the last two years, did so from companies that went bust.
And a survey of 2,000 shoppers found that 7% received a gift card for a retailer which has collapsed since March 2020.
The problem is that there's no automatic right to a refund.
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One in five of those with vouchers for collapsed stores had a gift card for an Arcadia Group retailer.
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 last Christmas.
Shoppers had to fund the other half of their purchases with their own money.
Lisa Webb, Which? consumer rights expert, said: "While often a popular choice for hard-to-please friends and family, Which? is advising consumers to think twice before buying gift cards this festive season.
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";With the economic outlook uncertain, 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."
If you don't spend the money before the expiry date, the gift cards will be worthless.
Should that be too strict for you, then cash will always be the most flexible gift.
What are your rights if a retailer collapses?
If you have a gift card for a retailer that goes bust, you could find it hard to get your money back.
When a firm collapses, administrators are brought in and they view customers with gift cards as creditors.
First of all, you should go to the shop and see if you can still use your voucher as some administrators will honour the purchase.
But otherwise, to get your money back, you’ll need to make a claim in writing to the administrators with proof of your vouchers.
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 could still repay you.
Another way to get your case back is to claim under Section 75 rules in the Consumer Credit Act.
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But you'll only be able to use this reclaim method if the gift card was paid for with a credit card and worth more than £100.
For vouchers under this amount, you could make a claim under Chargeback rules to your credit or debit card provider but there's no guarantee that will work.