How to buy the best gift cards
They're a great last-minute present idea, but gift cards can be a waste of money.
The gift card that stops giving
Gift cards make a convenient present, especially when you can buy them online or pick one up at your local Australia Post outlet. And there's sure to be plenty of gift cards bought before 25 December for that quick and easy Christmas present – in fact, Australians spend up to $2.5bn on gift cards each year.
But they've also been the subject of numerous complaints to CHOICE over the years. Here's how to make sure you get the most out of a gift card you buy or receive.
Gift cards can be a waste of money
Since we first looked at gift cards that quickly stop giving, people have continued to contact us with stories of plastic rectangles that cost real money but end up being worthless. In a CHOICE member survey from 2014, 60% of respondents had problems with gift cards, and premature expiry was the biggest issue. One in three of the 735 respondents had lost the full value of at least one gift card in the previous three years.
Recent reforms have imposed a minimum three-year expiry date on gifts cards in most parts of Australia, a welcome change that should go a long way toward preventing the most common gift card trap.
In parts of Australia where the reforms are not in place, your best protection is with the generic provisions of the Australian Consumer Law. For example, you may be provided some relief if the expiry date is considered unreasonably short and you may also be able to use unfair contracts legislation to take action against particularly unfair terms and conditions for gift cards.
But CHOICE has heard of many cases where complaints to the retailer fell on deaf ears. It never hurts to ask, though. Of our surveyed members who requested that an expired card be reinstated, about a third were successful.
Gift cards checklist
- Choose a card that doesn't expire...
- ...or go for one with the longest expiry date you can find
- Some gift cards allow a grace period after the expiry date or allow you to exchange an expired card for a new one.
- Ideally, you'd like to be able to check the card balance easily in-store, online or via phone. Beware of cards that charge a fee to check the balance.
- Look for a card that allows you to use it for an unlimited number of transactions until you've spent the whole amount.
- Minimum spend amounts can be an issue, especially if the retailer doesn't give change, as there may be an amount left on the card that you can't use.
Lost or stolen cards
- Treat your gift card like cash – if you lose it, it's gone.
- However, some retailers allow you to cancel and re-issue a lost card, sometimes for a fee. Conditions apply, so hold on to your receipts for gift cards and jot down details such as the card number.
- You can usually only use a gift card in a specific store, so choose carefully – respondents to our gift card member survey told us the worst cards were for stores they don't shop in.
- Cards that can be used in a group of stores are better like the Coles & Myer group or Wish (Woolworths) gift cards.
- Shopping centre cards can be used in an even wider variety of stores, but beware: they may not be accepted by all stores in the centre.
- EFTPOS and Visa/MasterCard gift cards can be used at almost any retailer.
Fees and charges
- Fees are mainly a problem with Visa and MasterCard gift cards. Most retailer cards have no fees.
- Some cards charge an issue fee.
- Others may charge a fee for extending the expiry period or reinstating lost or stolen cards.