Many people give gift vouchers as wedding presents, thank-you tokens, or Christmas gifts. They’re convenient from the gift-givers’ perspective, can be posted easily, and are sure to be appreciated. When you give a gift voucher, you’re allowing the person to choose whatever they want from that retailer. They could choose to put it towards a Vax carpet cleaner, a new dress, or an Acer laptop. The chances of you acquiring psychic powers and picking that exact gift are slim!
Saving for Gift Vouchers
Gift vouchers have become increasingly popular because they’re easy to save up for. You can buy £10 gift vouchers for popular retailers every week or two, and then you have a stack of them that you can divide up when birthdays and other special events come round.
At least, that’s the theory. Sadly, it doesn’t always work out like that. In 2011 alone, Holidays4U, Focus DIY, Jane Norman, and Habitat all went into administration, and as a result many people lost their money.
When you buy a voucher, you’re taking a gamble that the company will continue trading, and that they won’t change the voucher’s redemption terms. When Jane Norman went into administration, they continued honouring vouchers, but set restrictive conditions – the voucher had to be redeemed on a full-price purchase (sale items didn’t count), and the value of the purchase had to be twice the value of the voucher. While such terms might be acceptable to an avid Jane Norman shopping fan, it’s not as nice as giving the gift of being able to walk into a shop and pick up an item without handing over any cash at all.
Protecting Yourself
There’s no way to ensure that a company will never go bust – until a couple of years ago, nobody would have ever dreamed that a high street institution such as Woolworth’s would one day vanish from our streets. However, there are a few things that you can do to protect yourself.
Firstly, instead of buying your vouchers over a long period of time, save the money itself – put it in an instant access savings account, and buy the vouchers just before you need to give them.
If the person you’re buying for lives locally to you, consider buying vouchers for the local mall. Many malls offer voucher schemes these days, and by giving a voucher that covers many different shops, you’re removing a lot of the danger – even if one shop closes, there are other shops that will take the voucher. So, the recipient could buy clothes, chocolates, video games, power tools, or a Vax carpet cleaner. The choice is up to them.
Some people advocate buying everything on their credit card , for the insurance that the credit card companies offer. The law does not give a firm answer as to whether or not credit card companies would have to reimburse vouchers that were not honoured because the company that sold them closed down, but there’s a good chance that they’d refund you out of goodwill, so it’s worth considering – as long as you pay the balance in full each month. Racking up credit card interest over a few gift vouchers isn’t very economical!
This article was written by Amy Fowler for The Original Factory Shop; supplier of Vax products and other household goods at discounted prices. Amy recently tried to use some gift vouchers but they were rejected since they’d passed their expiry date. Amy believes this to be unfair since the shop has now recieved money while not supplying any goods.