More than 70 percent of us regularly buy gift cards. They’re the go-to option for shopping dilemmas. But strict expiry dates mean many consumers are getting stuck with cards they can’t redeem. The amount being lost is likely to add up to millions of dollars every year.
Join today and get instant access to all test results and research.
Our latest survey found one in five gift card recipients had been left empty-handed after the card expired before they could redeem its full value. Based on the typical gift card value, we estimate consumers could be losing $10 million annually.
In response to our campaign, retailers have begun to drop or extend their expiry dates.
Gift cards may be a quick fix for the last-minute shopper. But unfair expiry dates mean they can be little more than a gift to the retailer.
Of 60 cards we looked at, more than half expired after just 12 months. The meanest gift card was Ticketek’s: it runs out after a measly six months.
When a card expires, the retailer keeps any remaining money. Of the 20 percent of gift card users who’ve been stuck with an expired card, more than half had more than $20 left on the card. Ten percent lost more than $60.
Retailers are coy about revealing how much they earn from unredeemed cards. But company accounts reveal gift card income is typically calculated on the assumption a percentage of shoppers will never spend all the money on the card.
Paper Plus, which has 12-month expiry dates on its gift cards, provides for a “non-redemption allowance” in its accounts.
Ticketmaster, which also has a 12-month expiry date, recognises income from gift cards based on the amount “the customer is reasonably assured not to redeem”.
Few retailers publish actual figures on the proportion of cards not used before they expire. Of those that do, non-redemption rates are between five and 10 percent. Across a multi-million-dollar industry, that adds up to a tidy sum.
Retailers gain significant benefits from gift card sales. They get payment in advance. They also have the prospect of further sales when the card is used: retail sales data show customers who redeem gift cards often spend more than the value of the card.
But it’s hard to find a good reason why retailers need to impose expiry dates on the cards. Some companies, including hardware store Bunnings and menswear retailer Barkers, don’t use them.
Gift card expiry dates have been given the boot elsewhere. Most Canadian provinces have banned expiry dates. Ireland is planning to follow. Gift cards in the US are required to have an expiry date of at least five years. Since the law change, the proportion of cards not redeemed has reportedly dropped from 10 to less than one percent.
The majority of Kiwi consumers want the rules changed here too. Our survey found 54 percent of those who had a view thought gift cards should have no expiry date; 13 percent thought if there was a date, it should be up to five years.
We’re calling on retailers to end unfair expiry dates on gift cards.
We’ve written to the 10 major brands below, asking them to lead the way and ditch the expiry dates on their cards.
If companies don’t lift their game, we want the Fair Trading Act amended to make imposing expiry dates on gift cards an unfair practice.
Add your voice to our campaign and help us get change.
Drop the dates
As a customer of your store, I’m writing to ask you to remove the expiry dates on your gift cards.
Along with many other consumers, I think these dates are unfair. Every time one of your gift cards expires before it’s fully redeemed, a customer misses out.
Some retailers offer gift cards with no expiry dates. Do the right thing and drop the dates on your cards.
|Retailer||Gift card expiry date – at campaign launch||Gift card expiry date – now|
|Ticketek||6 months||12 months|
|AvantiPlus||12 months||12 months|
|Babycity||12 months||12 months – change pending|
|Baby Factory||12 months||None|
|Bendon Lingerie||12 months||12 months|
|Bike Barn||12 months||None|
|The Body Shop||12 months||24 months|
|Booksellers||12 months||12 months|
|Briscoes||12 months||12 months|
|Event Cinemas||12 months||12 months|
|Farro Fresh||12 months||None|
|Four Square||12 months||24 months|
|Freedom Furniture||12 months||12 months|
|Hannahs||12 months||Five years|
|Hoyts Cinemas||12 months||12 months|
|Hunting & Fishing||12 months||12 months – change pending|
|Just Jeans||12 months||12 months|
|KBB Music||12 months||24 months|
|Max Fashions||12 months||24 months|
|Michael Hill||12 months||Three years|
|Mobil Oil||12 months||12 months|
|New World||12 months||24 months|
|New Zealand Rockshop||12 months||24 months|
|Noel Leeming||12 months||None|
|Pak’nSave||12 months||24 months|
|Paper Plus||12 months||24 months|
|Pharmacy Gift Card||12 months||12 months|
|Prezzy Card||12 months||24 months - for cards sold from 1 March 2018|
|Rebel Sport||12 months||12 months|
|Repco||12 months||12 months|
|Restaurant Association||12 months||12 months|
|Shoe Clinic||12 months||Five years|
|Smiggle||12 months||12 months|
|Smiths City||12 months||12 months|
|Stevens||12 months after last use||24 months|
|Stirling Sports||12 months||12 months|
|Taxi Card (Blue Bubble)||12 months||12 months|
|Ticketmaster||12 months||12 months|
|Toyworld||12 months||24 months|
|Westfield Shopping Centres||12 months||12 months|
|Z Energy||12 months||24 months|
|Number One Shoes||15 months from date of purchase or last use||Five years|
|Jaycar Electronics||18 months||18 months|
|David Jones||24 months||24 months|
|Farmers||24 months||24 months|
|Gardening New Zealand||24 months||24 months|
|Harvey Norman||24 months||24 months|
|JB Hi-Fi||24 months||None|
|Kmart||24 months||24 months|
|Mitre 10||24 months||24 months|
|Palmers Gardenworld||24 months||24 months|
|Spotlight||24 months (12 months for e-gift cards)||24 months (12 months for e-gift cards)|
|Whitcoulls||24 months||24 months|
|The Warehouse||24 months after last use||24 months after last use|
|Glassons||Five years||Five years|
77 percent of consumers regularly receive gift cards.
$50 to $70 is the most common gift card value.
24 percent of gift card users are stuck with a card they can’t fully redeem because it’s expired or the store has gone out of business.
55 percent of shoppers unable to redeem a gift card had more than $20 still unspent.
50 percent of gift card users have experienced problems with their card including finding it hard to check the balance, only being able to use the card at a limited number of stores and struggling to find something to buy.
OUR DATA are from an online survey of a nationally representative sample of 1029 New Zealanders aged 18 years and over. The margin of error is +/-3.06 percent.
Been stuck with a gift card you can’t redeem? Let us know. Email firstname.lastname@example.org.
The main argument used by retailers is an expiry date makes it easier to account for gift cards on their balance sheets. But it’s not a strong argument. Some retailers don’t use expiry dates, showing they can be dropped without causing problems.
Ask the retailer to honour it. Some may offer a “grace period” but this isn’t usually advertised. Let us know the retailer’s response: email email@example.com.
While gift cards leave an electronic footprint and retailers are usually able to cancel them if they suspect misuse, terms and conditions often state the card won’t be replaced if it’s lost or stolen. Some companies say they’ll consider replacing a card if the customer’s able to provide the card number or a transaction receipt. But a fee normally applies to reissue a card.
Once a business changes hands, an unused gift card is usually worthless. The new owners are bound to honour it only if they’ve purchased the previous owner’s liabilities, which doesn’t happen often.
If you have a gift card for a shop that goes under before you can spend the money, you’ll have to register with the receiver as an “unsecured creditor”. If there’s any money left after the secured creditors have been paid, you could get something. But the chances are usually slim. When Dick Smith collapsed, gift cardholders were left with $334,578 in worthless cards.
If you bought a gift card using a credit card, you can ask your bank for a “chargeback” – a refund of the purchase price.
Ask what the expiry date is and whether there are any other conditions on the card’s use. Keep the receipt and include it with the gift card in case it’s needed as proof of purchase.
Cash – the government-issued gift card.