Retail: Vouch for failure

We give companies £240m a year in unused gift cards. What's wrong with a tenner in an envelope?

Beloved of great-aunts and last-minute shoppers, gift cards may be convenient presents to give at Christmas, but they are also one of the riskiest. As anyone who holds one for Comet will attest to. When the electrical-goods store became the latest high-street victim of the recession last week, its administrators, Deloitte, immediately announced that, despite stores remaining open and trading, gift cards and vouchers would be suspended. It may seem unfair not to honour the vouchers, but once administrators are in charge, they are allowed to change the rules applying to vouchers and cards – and many of them do. However, by Tuesday, Deloitte announced that the suspension on Comet vouchers had been lifted.

People with vouchers for JJB Sports lost out recently when the sports store went into administration, as did those with ones for Peacocks at the beginning of the year, the reason being that people with vouchers effectively become creditors of the company once it goes into administration. They must take their place alongside others owed by the company, including banks. But being unsecured creditors, they are seen as the least important.

We're a nation of voucher givers. We spent £4bn on them last year (up 12 per cent on 2010) and it is estimated that this Christmas we'll give £1bn worth of vouchers and gift cards (up nine per cent from last year). The average gift card is worth £25. But last year, customers failed to redeem £240m of cards and vouchers, meaning the money just went directly to the stores. Holders either don't realise that the cards have an expiry date or fail to use the full amount on their gift cards. Some six per cent of cards and vouchers are never spent.

However, if you're still keen to spread seasonal goodwill with store cards, Martin Lewis of MoneySavingExpert.com has some tips. "First of all, think about the solvency of the company. The likelihood is that Marks and Spencer and Apple are going to be all right," he says. "If you want to spend more than £100 I would buy them on a credit card (paid off in full) because of section-75 laws (of the Consumer Credit Act) that basically say the card company is jointly liable with the retailer so you won't lose out should a company go into administration."

Other problems with vouchers and cards are that many of them insist on being redeemed instore, not online. And often stores won't register them; if you misplace them, you lose out. Still, there are alternatives. "A safer way to do this is to give people cash and a note saying what you want them to spend the money on," Lewis suggests. "I know that cash is ugly but there are ways to dress it up. The great thing about cash is that it can't go bust."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions