Many of us will be buying and receiving gift cards this Christmas. They have become big business since the first book token was issued in 1932. Whether you think it shows lack of thought (why not give cash instead of restricting the recipient?) or shows more thought by showing that they have chosen a particular store, it is now big business. The voucher and gift card industry has grown into a £5.6bn a year operation in the UK according to the latest figures from the UK Gift Card & Voucher Association (UKGCVA). This up from 4bn in the previous year and is continually growing year on year.
Gail Cohen, Director General from the UKGCVA, says, “Research from The UK Gift Card and Voucher Association shows that 60% of members saw a growth in sales during H1 [first half of] 2016, and 4.44% growth compared to the same period in 2015.” This analysis is based on data provided by UKGCVA’s retail issuer members that agree to share their data.
The figure for the amount of unspent gift cards in the UK is £300 million, which accounts for just over 5% of the entire value of gift cards and vouchers in the UK. The UKGCVA says it is working with its members to increase consumer awareness around gift cards, with the aim of further decreasing this figure in the future.
Now that consumers can sell their gift cards they believe they will never use, this unspent figure may reduce. Zeek (that’s an affiliate link so if you use it and register at no cost then you and I should both get a payment!) is a marketplace website/app where gift cards can be bought and sold. Sellers can set their own price and the bigger the discount, the faster the voucher sells. Typical discounts right now are between 5% and 25%. Zeek takes 7% of the selling price (£3 minimum). This compares favourably with auction sites, such as eBay, which which takes 10%. Zeek verifies the balance and expiry date of every card that is listed for sale. Digital vouchers, which tend to be redeemed immediately, must be valid for at least a month. Physical vouchers, where you need time to get to the store, must be valid for at least 3 months.
A spokesperson for Zeek said that it sees thousands of new buyers and sellers join Zeek every day. November was their biggest ever month. 94% of vouchers sell within 24 hours. Department stores, supermarkets, Amazon and fashion always sell very quickly.
Zeek’s CEO and co-founder Daniel Zelkind said “Shopping with discounted gift vouchers is a simple way to cut the cost of the festive period and if Santa gives you a gift voucher you’ll never use, it’s easy to turn it into cash and buy something you actually want.”
Helen Dewdney, The Complaining Cow, consumer expert and author for How to Complain: The Essential Consumer Guide to Getting Refunds, Redress and Results! provides ten top tips regarding gift cards:
What should you be aware of when buying or receiving gift cards?
1) Always check the expiry date and spend quickly if you can so that you don’t forget it!
2) Make a note of the number. If you lose the card, the store should be able to trace the card, stop the amount and issue you with a new one.
3) If you return the item, whether you change your mind and the store allows it, or even if the item is faulty, the refund will be put back on a gift card.
4) It is unlikely that you will be able to use the card in store concessions but do check as this varies from store to store.
5) If the store goes bust it will be up to the administrators as to whether they will accept gift cards, so keep hold of them as it is unlikely but possible that they will be accepted. The purchaser may be able to get money back using Section 75 of the Consumer Credit Act if it was for more than a £100 and paid for on a credit card or using Chargeback if less than a £100 from your bank. The latter is a voluntary signed up to scheme rather than law.
6) When giving a gift card, also give the receipt which the recipient can keep in a separate place in case the card gets lost or stolen.
7) Check that you can use the card online.
8) Your consumer rights when buying goods or services are the same as when purchasing items with a gift card.
9) If your card has expired ask for an extension. There’s a chance the store may allow it.
10) Check the terms and conditions. Sometimes the expiry date is from when it is bought, last used or just checking the balance so you may be able to extend the gift card’s life time!