Martyn James: What to look out for when you go shopping with gift cards

Did you get a gift card for Christmas? Or maybe you have one lurking in your wallet or purse that’s nearing its expiry date? You’re not alone.

Gift cards are big business. It’s estimated that the gift card market was worth a whopping £7 billion in the UK last year – and that’s predicted to rise to £9bn in 2025.

Retailers love gift cards because millions of pounds go unspent every single year when the cards expire because we’ve forgotten to use them. So while gift cards are a great idea if you aren’t sure what to buy for a friend or relative for a special occasion, it’s only the shop itself that usually benefits.

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There are other problems with gift cards too. Here’s my guide on what to watch out for.

The gift card market was worth £7bn in the UK last year – a figure that is expected to rise to £9bn in 2025 (Picture: stock.adobe.com)The gift card market was worth £7bn in the UK last year – a figure that is expected to rise to £9bn in 2025 (Picture: stock.adobe.com)
The gift card market was worth £7bn in the UK last year – a figure that is expected to rise to £9bn in 2025 (Picture: stock.adobe.com)

Fraudsters and stolen codes

I recently took part in an investigation for You and Yours on Radio 4 that found fraudsters were targeting the racks of gift cards in supermarkets, stealing the codes and using them to nick the money that innocent shoppers loaded up on the cards at the till.

While this is a relatively new method of fraud in the UK, in America, it’s estimated that $217 million was lost to this type of scam last year. Of course, the best way to prevent the fraud from happening is to move the actual cards behind the till. But savvy shoppers are advised to look to see if packaging has been tampered with, like the silver coating that covers some codes being scratched off.

It’s my view that the law says the retailer is responsible for refunding you if you are a victim of this kind of fraud. So don’t be fobbed off to the brand named on the card. After all, the fraud took place in the store where you purchased the gift.

What other things do I need to look out for?

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The mistake most of us make with gift cards is missing the expiry date – so pop it in to your diary one month before it is due to happen. But there are other things to watch out for.

One of the biggest cons with cards and vouchers is the fact that some retailers require you to use them all in one go. Say you have a gift card for £100 and you want to buy items that cost £60, some shops will not give you £40 credit on the card – you have to spend the lot.

Check on the shop’s website online to see if there are sneaky T&Cs like this. I’d make plans to see if you can spend the whole amount on things you actually want, or choose something extra that you can give to someone else as a gift.

You may also find that there are some restrictions on what you can buy with the gift card. This generally happens with cards that you can use at multiple shops.

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If you think the restrictions are unfair, then the purchaser of the card or voucher can make a complaint to the retailer they bought it from, on the grounds that the item has been misrepresented. You can make a claim on this basis under the Consumer Rights Act, which is where the bulk of our shopping rights come from.

When shops go bust

When a business goes bust, then your gift cards and vouchers cease to have value. Even if another business purchases the brand, they may choose not to honour the old retailer’s vouchers.

The moral of this tale then, is as soon as you hear a business might be going to go under, spend the gift card. If there’s a high street branch then I’d head there first and foremost, even if the shop’s website is still operating.

This is because you’ll be able to leave with the goods, as opposed to waiting for an online delivery that might not occur. Many millions of pounds have been lost to online orders that didn’t get fulfilled when a retailer went in to liquidation.

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist. For more from Martyn, click this link

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