Thursday 22 August 2019

How to play your cards right this Christmas

Gift cards can suit both the purchaser and the receiver - but just make sure you both read the small print

Gift vouchers can have terms and conditions attached which make them restrictive and expensive to use. Photo: Getty Images/iStockphoto
Gift vouchers can have terms and conditions attached which make them restrictive and expensive to use. Photo: Getty Images/iStockphoto
Sinead Ryan

Sinead Ryan

This year almost everyone will either give, or receive, a gift voucher for Christmas. Indeed, many people ask for them specifically as they give freedom of choice and save the blushes after you've gasped in horror at the reindeer jumper your brother thought you'd love. They're practical, straightforward and best of all, there's no dragging yourself around the shops to find that elusive special gift for someone.

Even Michael Noonan is a fan! The finance minister recently increased the non-cash benefit for employees from €250 to €500 in the budget (effective immediately) allowing them to receive small gifts without having to pay Benefit in Kind. Gift vouchers fall neatly into this category and are popular with companies who want to provide a thank you to hard-working staff without them being taxed on it.

However, useful and all as they are as a gift, vouchers can have terms and conditions attached which make them restrictive and expensive to use. There is little or no consumer protection in the area, compared to a shop or even online retailer. If you don't keep to the sometimes very exacting requirements, you could find yourself with them expired before you know it, and a complete waste of money.

A proposed Consumer Rights Bill coming down the line may outlaw expiry dates and ensure voucher money is held by retailers in a separate account in the event of it going insolvent.

A study from the Competition & Consumer Protection Commission last year found that an alarming 48pc of all vouchers remain unspent, mainly because people don't understand the expiry conditions, or put vouchers in a drawer and forget about them until it's too late.

So, like any gift, it's best to ask the recipient what they'd like: there's little point in getting a voucher for a shop they rarely use, or one which is franchised and the others in the chain won't accept it.

There are two types of product sold: the traditional paper based voucher for a set value and expiry time and which, if lost or mislaid, is the owner's tough luck. It can be extremely difficult to prove the loss and shops often won't accept sob stories.

A slightly better bet might be the plastic gift card, generally used by the bigger department stores or shopping centres. These often come with a specific number which is traceable if you lose it, but beware: many stores will charge you a replacement fee - up to €7.50 in some cases.

Another bug bear is the Inactive Balance Charge (IBC). This is a sadly common anomaly where you are charged for not using your voucher. It generally kicks in after a year whereupon a monthly fee is deducted automatically from the card, essentially a 'punishment' for not spending it. Quite why a store, which has already received the money up front, feels the need to do this, is anybody's guess. It's mean spirited and annoying.

For maximum flexibility, lots of people like the idea of a catch-all card, which can be spent with a wide range of retailers. The One4All card is the market leader from An Post and covers 7,000 retail outlets, making it versatile; this is in its favour. However it applies a charge both to purchase it (a flat €2) and an IBC which is €1.45p.m. after month 12.

The company defends the practice by saying, "Most cards are spent within the first three months, and it is rare for cards not to be spent. Ultimately the company does not get paid from the card until the money is spent and One4All cards are governed by the EUs e-money directive. This means the funds on cards are kept in a segregated account to ensure maximum consumer protection. If the card is lost, we are able to replace it with the full balance.

"However if, after a full year, there is no spend on the card the company does need to apply a minimum charge to cover things like administration of the funds and so on. The details are made clear in the terms and conditions of the card."

They're not the worst. Both Dundrum and Blanchardstown Town Centres charge €3p.m. after a year if cards are not used up.

Aer Lingus came under fire in RTÉ's Liveline earlier this month after its onerous terms and conditions were aired. The voucher itself costs €7 (!) and it is non-transferrable, can't be used with partnership airlines and voids immediately on the expiry date, which is normally 12 months.

By comparison, some outlets, such as Ikea and Boots have no expiry date at all and no fees if you take your time spending it.

Shopping around is always important at Christmas, and just because it's a voucher, doesn't make it any less so. Always ask about T&Cs so your grateful recipient is not embarrassed when they come to redeem your kind gift.

Irish Independent

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