Beware the risks of giving gift vouchers

Esther Shaw / 22 July 2020

Expiry dates and shops going bust can make buying gift vouchers and gift cards risky. Read about the pitfalls and avoid getting left out of pocket.



Gift vouchers can be a convenient way of giving presents – and can be particularly useful if you have a tricky-to-buy-for friend or you want a more personal alternative to giving money as a gift.

But, tread carefully before purchasing, as vouchers can come with a raft of pitfalls that can leave you out of pocket – and the person you’re buying for empty-handed. The first important rule to be aware of is that your rights will depend on whether you purchased the voucher or not. If you were given it as a gift and something goes wrong, you’ll need to talk to the person who gave it to you.

What happens if a retailer goes bust?

If a retailer collapses, any customers with vouchers are seen as creditors. This means there is no guarantee you’ll be able to use the vouchers or get your money back, however you can make a written claim to the administrators with proof of your vouchers.

If you’re lucky, the retailer may honour the vouchers – it’s always worth calling or visiting the store (if it’s still open) to find out first, or asking the purchaser to do so on your behalf. But in many cases, you’re likely to find that the vouchers will no longer be accepted, meaning they are worthless.

If the vouchers were bought on a credit card and the value is under £100, the purchaser can also make a Section 75 claim under the Consumer Credit Act.

Find out about the costly credit card mistakes you should avoid.

Check for expiry dates

Another of the downsides of vouchers is that they usually come with expiry dates. The time limit can range from a few months up to as long as 10 years depending on the retailer.

This means that, if you don’t take note of the date, they could risk getting lost or forgotten. If your vouchers expire, firms are not required to honour them. However, they are required to make the buyer aware of the time limit when they buy them. This means that if you can prove that the expiry date conditions weren’t clear when you bought the voucher, you may be able to get the time limit extended.

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Lost gift cards

If you have lost your gift card – or had it stolen – you may be able to get your card cancelled and your balance transferred to a new one. This will depend on the gift voucher's terms and conditions and the retailer's policy. It usually helps if you can provide some information about when it was purchased, along with your unique gift card number.

Inactive balance charge

It’s worth noting that some cards come with an ‘inactive balance charge’ after a certain period. This may mean that you have to use the card every year or so to avoid a monthly charge being deducted.

Penalties for under-spending

In addition, you should be aware that if you don’t use all your vouchers in one transaction, you may not get the full value, as some retailers will not give you a refund if you under-spend.

Say, for example, you have a £20 voucher and use it to buy items worth £16, you may not get the £4 change, although you may be offered the change on the gift card to spend at a later date.

Opt for a multi-store card

While most vouchers are attached to one particular retailer, there are certain schemes which allow you to spend your money at a variety of retailers.

A multi-store card can make good sense if you’re worried about a particular firm going bust, as you can still spend your money elsewhere.

The One4All card, for example, can be used in 55,000 outlets nationwide and online, including Argos, Boots, Topshop, M&S, John Lewis and TK Maxx.

The One4All card allows you to spend both online and in a physical store, but not all gift cards and vouchers do the same. Make sure you find out what the options are before you buy.

What about digital gift cards?

More and more retailers are offering digital gift cards, also known as e-gift cards. These are issued by emailing the recipient a gift card with a unique code.

Depending on the retailer and the terms, your code may be exchanged in stores and online. Your rights and terms of condition remain the same as with a physical gift card – the only difference is that you won’t have a physical voucher to spend.

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The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.