Book store woes highlight gift voucher risks23 Feb 11 12:19PM EST |
This current situation with the parent company of the Borders and Angus and Robertson bookstore chains going into voluntary administration highlights one of the risks involved in buying gift vouchers; you’re giving money that could potentially never give a return.
When a company goes into administration, people holding gift vouchers become unsecured creditors and must stand in line with all the other parties owed money. And when you consider that the gift voucher industry is a growing industry worth $1.5 billion a year, there could be many people finding themselves in this situation in the future.
In the case of Borders and Angus and Robertson, the Administrators have ruled that in order to redeem gift vouchers you must spend twice the face value of your voucher. In other words, if you have a $50 gift voucher you would have to choose between forgoing the $50 voucher, or spending an extra $50 so that you purchase goods to the full value of $100.
So either way it will cost you the face value of your voucher – either as a loss or an extra spend.
This is not a normal scenario. The Administrators may have taken this line to increase cash flow and/or to offer a sweetener to consumers who would otherwise be unlikely to redeem any value on their gift vouchers.
It's important to note that there hasn’t yet been a time limit set by the Administrators for the redemption of the gift vouchers. However, when CHOICE spoke with some staff at Angus and Robertson they said they will learn more about the Administrator's plans in the first week of March. So if you want to redeem a voucher it might be advisable to do so before then.
Our report on gift cards highlights some other aspects to be mindful of when buying gift cards:
- Expiry dates
- Fine print around lost or stolen cards
- Restrictions on which shops accept the card
- Hidden fees and charged
Does the Border/Angus and Robertson situation make you think twice about giving vouchers in the future? If you’ve got one of their vouchers do you plan on spending the extra money to redeem it, or will you just cut your losses?