NCA warning on gift vouchers
4 December 2009
NCA encourages consumers to be aware of risks associated with gift vouchers and to spend them quickly
The National Consumer Agency today warned consumers purchasing Gift Vouchers for Christmas to be conscious of the risks where the retailer issuing them may be in trading difficulty and to check expiry dates carefully.
The NCA also urged consumers to check the window allowed by retailers to return purchases as recent reports suggest shops were shortening the time period they allowed for "no quibbles" returns.
"We receive frequent enquiries around what happens with a gift voucher issued by a business that has ceased trading," said Ann Fitzgerald, Chief Executive, National Consumer Agency.
"In these difficult economic times, this is likely to become a more common concern. Unfortunately, gift vouchers do not benefit from any special protections in the event of the closure of a business.
"In the current difficult trading circumstances, the NCA strongly urges consumers holding or receiving gift vouchers to use them quickly.
"Where a credit card has been used to purchase the voucher, it may be possible to seek a refund via the credit card company. If the voucher was purchased by cash, however, voucher holders are treated like any other unsecured creditors of the business."
As the name suggests, unsecured creditors rank behind other creditors who may hold some form of security against the business and this almost always means that there are little, if any, surplus funds available after winding up to refund monies owing to voucher holders.
The NCA also urged consumers to time their shopping carefully, for their Christmas gift purchases, to ensure that there is sufficient time for the recipient to seek exchanges or refunds within the limits applied by retailers.
While retailers are not obliged to accept returns on a "change of mind" basis, many operate a goodwill based returns policy, but there usually is a defined time window for this, so be sure to check before you buy.
Ann Fitzgerald said: "Recent reports suggest that some businesses, affected by the current downturn, are scaling back on their 'no quibbles' returns policies.
"So if it's important to you that the recipient of a gift can bring it back for an exchange or a refund if it is not suitable, check before you buy whether they will be able to do so and within what time frame.
"Consumers should also ask for a gift receipt to pass on as proof of purchase."
However, where goods are faulty or otherwise not fit for purpose, consumers have a statutory entitlement to return an item for a repair, a refund or a replacement.
Learn more
Check our latest survey of gift voucher and gift card expiry dates