Consumer NZ is urging New Zealanders to check the expiry dates on any gift cards they have received over the holiday season, so they don’t miss out on redeeming them.
According to Consumer research, 24% of gift card holders end up stuck with a card they can’t fully redeem because either the card expires or the retailer goes bust.
The watchdog estimates that New Zealanders are collectively losing in excess of $10 million per year on unspent gift cards.
“We have been looking into the expiry dates of many different retailers to gauge how long people have to redeem their gift cards,” said Gemma Rasmussen, Consumer head of communications and campaigns.
The watchdog reviewed 61 gift cards and found only 14 didn’t have an expiry date.
“We applaud these 14 companies and would like to see others follow suit. A few retailers have five-year expiry dates, which is better than the norm of one to two years.”
The shortest expiry period of the companies reviewed was 12 months.
Consumer’s investigation also found 14 of the 61 cards only last for a year, but it has received complaints about other organisations with shorter expiry dates, such as beauty salons which often only give six months. Once that time has lapsed, any unspent credit usually stays in the retailer’s coffers.
“If you received a gift card from a retailer that only gives customers 12 months to redeem it, you should spend it soon,” Rasmussen said.
“Although some companies will offer a grace period after a gift card has expired, they’re not obliged to. So, use it or lose it, basically.”
Consumer understands some retailers calculate gift card income on the assumption a percentage of shoppers will never spend all the money on their gift card.
“Of the few retailers who publish non-redemption information, they calculate non-redemption rates between 5 and 10%. Across a multimillion-dollar industry, this adds up to a nice little earner for retailers.”
For many years Consumer has been campaigning to end unfair gift card expiry dates. When a gift card expires, the retailer pockets any money left on the card.
New Zealanders are getting short-changed compared with those in other countries. In Australia, consumers have a minimum of three years to use their gift cards. And in Canada, the US and Ireland, there are either no expiry dates or at least five years to spend gift cards .
“It’s particularly shocking that retailers operating on both sides of the Tasman give Australian card-holders preferential treatment,” Rasmussen said. ”Many retailers won’t match the three-year timeframe here in Aotearoa.”
Recently, National MP Melissa Lee’s Fair Trading (Gift Card Expiry) Amendment Bill was drawn from the ballot. If passed, it would see the minimum expiry date of gift cards extended to three years.
“We are hopeful this bill will be passed this year,” said Rasmussen, “but we’ll be pushing for a minimum of five years to ensure consumers don’t miss out on what’s rightfully theirs. In the meantime, check your gift card expiry dates and use them, before it’s too late.”