Gift card traps

Traps to watch for

• Expiry dates Will the card be honoured after this date? Of the gift cards we looked at, the Bunnings card does not expire at all. David Jones say they will exchange expired cards for new ones and JB Hi-Fi say they will always honour their gift cards, even after they’ve expired. A large number of card providers told CHOICE they allow a grace period (usually one month) after the card has expired. 
• Be especially wary of cards that state only their issue date rather than the expiry date (they usually also state the time period for expiry after the issue date), which is the case for Coles, Coles Group & Myer, JB Hi-Fi, Big W, iTunes, Village Cinemas, Westfield and Myer gift cards. 
• You should also be able to conveniently check the remaining value on the gift card. While most allow you to do so via a website or dedicated customer phone number, others require you to check the balance in-store.
• Gift cards not honoured for transactions less than a specified amount You cannot use the Dymocks gift card for amounts less than $5, so if there is $4.50 left on your card and you want to buy something for this amount (such as a greetings card), your only option is to buy something more expensive and pay the amount above the value on the card. While none of the other cards we looked at have such conditions, there are those that cannot be used for a sale under $10 or even $20.
• Lost or stolen cards You normally have to treat your gift card like cash – if you lose it, it’s gone. However, some retailers allow you to cancel and re-issue a card you’ve bought, sometimes for a fee (see table, opposite). Conditions apply, so hold onto your receipts for gift cards and jot down details such as the card number.
• Restrictions about which shops accept the card You can usually only use a gift card in a specific store or group of stores, such as the Coles Group & Myer gift card and Woolworths Wish card. Shopping centre cards, such as Westfield, can be used in a wider variety of stores, but note that it’s not accepted by all stores in a Westfield shopping centre – in particular, none of the Coles group (except Kmart), Myer or Woolworths group stores accepts it.
• Will you get change? For most cards, the answer is no, but you can use the card again if you haven’t used the full amount. Of the cards we looked at, only the Bunnings card allows change up to $9.95, providing you with a new gift card for the rest of the difference.
• Fees and charges Fees are mainly a problem with Visa and MasterCard gift cards. Most retailer cards have no fees, with some exceptions; the Westfield gift card charges a $1.95 issue fee and, while Red Balloon allows an extension of their experience vouchers for up to three months, there is a hefty $10 charge per month for this or a $30 charge for a one-month extension if the voucher has expired.

Beware Visa and MasterCard exit fees

Visa and MasterCard gift cards are available from your bank, retail stores or online. They can be used at most retailers or businesses that accept Visa or MasterCard, so they’re valid at many more places than other gift cards. The downside is their fees. There is usually a purchase fee ($5.95, for example), and there may also be fees of up to $4.50 for checking the card’s balance over the phone (less expensive or free online, or automated phone services may be available). These gift cards usually expire after 12 months and any remaining balance is lost. They usually must be treated like cash (most lost or stolen cards won’t be refunded), although a few cards can be replaced, so check carefully. Some cards allow you to reload them and don’t expire. However, read the fine print carefully as reload and monthly fees can apply, as can a transaction fee every time you use the card. The retailer may also charge you a surcharge for using a Visa/MasterCard.

Converting unwanted gift cards to cash

A new website, www.cardlimbo.com.au, allows you to sell unwanted gift cards from about 100 retailers for 60% to 90% of their value and buy second-hand cards for 70%-96% of their value. Cardlimbo also allows you to donate gift cards to charity.

TABLE NOTES 

* Allows variable amounts such as $39.50; normally there is a minimum of $5 or $10 and an upper limit.
 **A fee may apply. 
(A) Valid at Myer, Target, Baby Target, Target Country, Kmart, Kmart Tyre & Auto, Coles, Coles Central, BI-LO, Pick’n’Pay Hypermarkets, Liquorland, Vintage Cellars, 1st Choice Liquor Superstore and Officeworks stores. 
(B) Valid at Woolworths & Safeway Supermarkets, Woolworths & Safeway Liquor, BIG W, Dan Murphy’s, BWS, Thomas Dux Grocer, participating Dick Smith stores and participating Caltex fuel outlets. 
(C) Red Balloon offers three types of vouchers: “experience vouchers” with six months expiry, “range vouchers” and gift certificates with 12 months expiry. Experience vouchers can be extended for $10 per month for a maximum of three months; if the voucher has expired it can be extended for one month for $30 within 30 days. 
(D) Not accepted by all stores in a Westfield shopping centre – check www.westfield.com.au for details and look for the “W” icon next to the store name. None of the Coles group stores (except Kmart), Myer or Woolworths group stores accept it. $1.95 issue fee applies. 
(E) $30 minimum. 
(F) Grace period applies – usually one month. 
(G) David Jones told us they will replace expired gift cards with a new one if it’s presented in-store; balance must be more than $5. 
(H) The later of two years from the date of issuance or last activity on an iTunes Store account. 
(J) Can be extended to 24 months; JB Hi-Fi told us they will honour expired gift cards. 
(K) Gift cards purchased online only.

Case study: Westfield warning

Last year Joan* was presented with two Westfield gift cards to the total value of $1000, upon her retirement. She failed to use the full value of the cards within the required 12 months. “I was actually 7 days late when my card was rejected in a Westfield Shopping Centre. The value on the cards still remaining was $560. I have been through the process of applying to the Westfield Gift Card Team to have the card date extended, or the remaining value of the card refunded, but received a letter saying that my application has been denied.”

Joan says she is aware of retailers who have gift cards without an expiry date. "I wonder why it is necessary for Westfield to do so when the only people to lose are those who have given the gift in the first place? I strongly feel the consumer should be warned of the risks associated with such gifts.”

A Westfield spokesperson, Julia Clarke, said the 12-month validity of the company's gift cards is stated clearly on the back of cards, and in the terms and conditions available at all Westfield customer service desks and at www.westfield.com. “At times there may be extenuating circumstances in which an expiry period may be extended or reinstated, however it is not normal practice.”

* Name changed to protect identity.

The last word

Says CHOICE member Graham Brown: “The only gift voucher I will accept is one issued by the Australian Government,“ Graham says.” These gift vouchers have so many benefits – no fees, no restrictions on where or when you can use them and you can even use part of them and get change. The vouchers come in many useful denominations and combinations: $5, $10, $20, $50 and $100. The best feature is that they can be used anywhere in any way. Now when I am given an Australian government gift voucher, it goes with my own collection of vouchers in my wallet and can be quite useful at any time I choose.“