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."
Marvel has released the first teaser trailer a week early after it leaked online
- 1 Nokia no more: Microsoft drops once-ubiquitous mobile name – in favour of its Lumia brand
- 2 Renee Zellweger on plastic surgery: 'I'm living a fulfilling life and I'm thrilled that perhaps it shows'
- 3 Banksy not arrested: Internet duped by fake report claiming artist's identity revealed
- 4 Australian café owner sparks debate after saying 'No' to having unruly children on premises
- 5 Paralysed man Darek Fidyka walks again after treatment by British doctors on brink of 'cure' for paralysis
Ottawa shooting: Canadian soldier dies after being shot at National War Memorial – with one gunman killed inside parliament
Renee Zellweger on plastic surgery: 'I'm living a fulfilling life and I'm thrilled that perhaps it shows'
Isis releases first video showing the stoning of woman accused of committing adultery as her father shouts 'don't call me Dad'
Banksy not arrested: Internet duped by fake report claiming artist's identity revealed
Diwali 2014: What is the festival of lights and how is it celebrated around the world?
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
iJobs Money & Business
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...