Take a quick look through your wallet and see if you have any gift cards from your friends, co-workers or family that are screaming to be used.
A recent report by the Commonwealth Consumer Affairs Advisory Council (CCAAC) has highlighted the unfairness of the gift card market.
Whilst given with good intentions, an estimated $400m is lost each year due to gift cards that are left unredeemed. Call it procrastination, poor memory or unfair terms and conditions; the problem is usually experienced by the recipient and not the purchaser of gift cards.
Aussies spend $1.5bn annually on purchasing gift vouchers and with one-fifth of gift vouchers not being used, retailers come out as winners.
Most recipients fall victim to the short life span of gift cards, which generally range from six months to two years. According to NSW Fair Trading Minister, Anthony Roberts, all gift cards in the US last for a minimum of five years.
So what are our rules on gift cards? The Corporations Act 2001 specifies that vouchers can be used multiple times and must clearly state the expiry date. However, you can’t add value to a gift card, nor exchange it for cash unless there’s a small remaining amount left on the card.
If the card doesn’t have an expiry date, the card is valid for a “reasonable” amount of time.
What happens if a gift card was purchased just before the ownership of the retailer changed hands? That’s even trickier.
To redeem a gift card in this situation, the previous owner must be a company (not an individual) and the new owner is a shareholder in that company. Additionally, the previous owner must not have been going into liquidation when selling their business.
On the other hand, if the previous owner was deep in the red, the new owner does not necessarily have to accept the gift card.
Apart from these issues, the CCAAC report also noted some gift cards do not allow you to purchase items that are below a certain price, charge recipients for having an outstanding balance on the card and mislead customers about which stores accept the card.
Still on the topic of gift cards, there are recent warnings against buying gift cards from social networking sites. JB Hi-Fi has told customers that the free $200 gift voucher advertised on its Facebook page was a scam.
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