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Gift cards that stop giving

CHOICE says some gift cards invite Scrooge to Christmas

11 December 2014

Although Australians spend $2.5 billion a year buying gift cards for family and friends, many consumers are unaware that the card they are buying might expire before it is redeemed, taking the good cheer out of Christmas and leaving your loved ones empty handed.[1]  

“While gift cards might seem like a convenient option, selecting the wrong one can see your loved one wrapped in tricky terms and conditions and stuck with nothing more than a piece of plastic by next Christmas,” says CHOICE spokesperson Tom Godfrey.

“A host of businesses including Dymocks, Hoyts and Westfield offer up harsh ‘bah, humbug’ gift cards that expire after just 12 months. Even worse are gift cards from small beauty salons or restaurants with a three to six month expiry. To avoid the gift card Scrooges this Christmas look for a card without an expiry date or just give cash.”  
“In effect, consumers are handing back millions of dollars a year to retailers in expired gift cards. So next time you purchase a gift card, it is worth considering who you are actually giving a present to – the retailer or your loved one.” 

New research by CHOICE found that in a survey of 1000 Australians 88% have given or received a gift card in the last 12 months. On average Australians received and gave two gift cards in the last year. [2]

CHOICE also surveyed 735 of its members and found only 26% prefer gift cards to cash and 35% of respondents have had a gift card expire before they could use it. Consequently 50% prefer gift cards to never expire. Cards with no expiry dates or that could be used at multiple retailers were found to be the most popular by survey respondents.[3] 

“With some retailers seeking to deny you the ability to redeem your gift card after 12 months, it’s easy to understand why consumers would prefer cash,” says Mr Godfrey.  

“If you are still tempted to purchase a gift card, make sure you read the terms and conditions and understand the restrictions around when, where and how it can be redeemed.” 

“CHOICE receives complaints about gift cards over and over again each year, so it’s very much a case of buyer beware.”

Gift card tips:

  • Some retailers will replace gift cards if they are lost or stolen so keep the receipt in a safe place.
  • Read the fine print and be on the lookout for tricky terms and conditions.
  • Buy a gift card without an expiry date.
  • Avoid gift cards with issue or activation fees and fees to call customer service.
  • If the gift card expires before it is redeemed and the retailer refuses to accept it, complain to Consumer Affairs or Fair Trading in your state.
  • Cash can be a better gift as it doesn’t expire.

About the research

The research was designed and analysed by CHOICE.

CHOICE Omnibus Gift Card Survey 2014
  • 1000 Australians aged 18-64 years
  • Measured the incidence of receiving and giving gift cards in the last 12 months
  • Fieldwork was conducted by Nine Rewards between 13 and 22 October, 2014
  • The data was weighted to ensure it is representative of the Australian population based on ABS Census 2011

CHOICE Member Gift Card Survey 2014

  • 735 CHOICE members
  • Measured preference of receiving a gift card vs. cash for Christmas, incidence of having an expired gift card, ideal expiry and the gift cards they’d like to receive this Christmas
  • Fieldwork was conducted between 24 September and 13 October, 2014
[1] http://www.treasury.gov.au/PublicationsAndMedia/Publications/2012/Gift-Cards/HTML/Part-II

[2] CHOICE Omnibus Gift Card Survey 2014

[3] CHOICE Member Gift Card Survey 2014

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