Make sure your gift voucher doesn’t go down the drain with these tips

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GIFT cards are more popular than ever, but beware – the top-selling one devalues by 90p a month, others are valid for only a year and, if the shop goes bust, they become worthless.

For shoppers short on time, they may seem a more personal Christmas present than cash, but they can be a ticking timebomb to money wasted, a Sun Money probe reveals. 

Its use it or lose it in the game of (gift) cards

More gift cards are being bought this year as shoppers try to avoid going into physical stores because of fears over catching Covid. Some families are also avoiding in-person present-swapping. 

The Gift Card and Voucher Association said around £6.9billion will be bought this year, up from £6billion in 2018.

So what can you do to make sure your gift voucher doesn’t go down the drain?

SHOP GOES BUST AND YOUR GIFT CARD GOES TO DUST

If a retailer goes bankrupt your gift card will be worthless or greatly devalued, as struggling firms do not legally have to honour vouchers.

That’s a bigger worry this year than any since the credit crunch of 2008 as Covid causes havoc on the High Street.

Brands like Warehouse, Cath Kidston and Oasis have all called it quits this year, while Debenhams along with Arcadia Group’s Topshop, Topman, Dorothy Perkins and Miss Selfridge have fallen into administration during the past month.

At Topshop, for example, customers are still allowed to use gift vouchers in store and online, but they can only be used when the shopper’s total spend is at least twice the value of the gift card.

So if you have a £10 gift card you’ll need to spend at least £20 in order to use it, making it worth only 50 per cent of its original value.

If you are going to go the gift card route for Christmas 2020, make sure you research the stores you would like to purchase from to make sure they can weather the pandemic storm — at least until the gift card’s expiry date.

SPEND IT FAST

If you’re on the receiving end of a gift card this Christmas, make sure you check the expiry date and set an alert on your phone to spend it before time runs out. Some 65 of 72 gift cards from leading retailers have expiry dates, with 57 expiring within two years or less. All information about expiry dates is buried in the terms and conditions for 49 of them.

Some stores start the clock ticking as soon the gift card is purchased. 

This sneaky trick means if an organised shopper buys them in October then the recipient only has nine months to spend the balance by the time they get it. 

Experience gift cards — for activities like the theatre, sports, spa days or travel — are particularly controversial as they can have separate expiry dates for when the card must be activated and for when the experience must take place. 

Some stores have different terms depending on whether the gift card is physical or virtual. For example, Boots’ regular gift cards are valid for 24 months from when they were last used but its eGift cards must be used within 12 months from purchase. 

And Argos has a three-year expiry date on its regular gift cards but only two years on its eGift cards. Another reason to get spending quickly is inflation.

Inflation means £10 spent next year will buy slightly less goods than £10 spent this year, so it’s better to use gift cards sooner rather than later.

These time constraints can make receiving a gift card feel more like receiving an item on your to-do list rather than cash.

DISAPPEARING BALANCE

A POPULAR Christmas gift card sold by the Post Office, Tesco and Morrisons has been slammed because it runs out of money even if you don’t use it.

The One4all gift card is a hit because it is accepted at 60,000 high street stores including Currys, Boots and M&S, but there is a catch.

A year and a half after the card is bought an “inactive balance charge” of 90p is deducted each and every month. This means that a £10 gift card would be worthless within a year of the fee kicking in.

There is no expiry date but that is meaningless as most have lost their balance by then. For many this comes as a shock since there is no mention of the 90p a month fee unless the recipient somehow manages to find the terms and conditions. 

The small print is hidden away on the site under Help and FAQs.

The One4all card does have some advantages, though. It works at a raft of retailers and its funds are held by the Bank of Ireland in a separate account, meaning they would be protected if One4all went bust.

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