By the time you read this, there will be just over 100 shopping days until Christmas. Scary! For those, like me, who are imaginatively challenged when it comes to buying presents, a gift card might seem like the perfect answer. Why suffer the humiliation of the 20-year-old niece respectfully folding up the multi-coloured jersey you spent hours and dollars shopping for knowing it’s never going to see the light of day? A gift card from a shop of their taste takes away the hassle. Well it should do.
Unlock all of Consumer from just $12 a month
Our latest research shows one in five gift card recipients are left empty-handed because of stingy expiry dates. We estimate consumers could be losing $10 million annually. But your loss is the retailer’s gift. They keep the cash spent buying the card and the goods you might have bought using it.
Of 60 cards we looked at, more than half expired after 12 months. The most egregious was Ticketek’s — it runs out after six months.
Our advice is to use gift cards as soon as you get them to avoid being stuck with a dud if the shop goes bust. But it’s amazing, when you receive a gift card, how fast those months go by. Our research showed 24 percent of gift card users were stuck with a card they couldn’t redeem because it — or the shop — had expired!
Gift cards in the US are required to have an expiry date of at least five years. Most Canadian provinces ban expiry dates and Ireland is about to follow. There are a few stores here offering cards that don’t expire, including Apple Store, Barkers, Bunnings and online shop Mighty Ape. Glassons has set its expiry date at five years. This shows they can be extended without causing any problems.
We reckon if there is an expiry date, it should be at least five years. Most Kiwis agree the rules need to change. Our survey showed 54 percent of those who had thought about it wanted no expiry date. Thirteen percent thought if there was to be one it should be at least five years.
It’s hard to find out how much non-redemption contributes to a shop’s bottom line but company accounts show gift card income is typically calculated on a percentage of shoppers never spending all the money on the card. Few retailers publish figures on the proportion of cards unredeemed. Of those that do, the rates are between five and 10 percent.
Our survey showed 77 percent of consumers regularly received gift cards. The typical value was between $50 and $70. Of those stuck with unusable cards, more than half said they had at least $20 left unspent.
We’re calling on retailers to end unfair gift card expiry dates. We’ve asked 10 big brands to lead the way. You can add your voice by using our template letter to let retailers know you also want these unfair expiry dates to end.
We’d like businesses to do it voluntarily. But if they don’t we’ll be asking the minister for changes to the Fair Trading Act to make imposing expiry dates an unfair practice. We’ll keep you posted.
About the author:
Sue Chetwin has been our Chief Executive since April 2007 after more than 25 years in print journalism. She was formerly the Editor of Sunday News, Sunday Star Times and the Herald on Sunday.
Sue oversees all of Consumer’s operations and is also the public face of the organisation. Sue is a director of the Banking Ombudsman Scheme and a member of the Electricity Authority Retail Advisory group.