Saturday, December 13, 2008

Look this gift horse (voucher) in the mouth!

Its that time of year again, where many of us drag ourselves around the shops to buy those presents for family and friends. I am not one of those organised people, who draft a list in September and has all the gifts bought and wrapped by November. I usually leave things until the last minute, indeed I can remember some years where I only started on Christmas eve, not to be recommended! For people like me, the gift voucher is the great saviour. If I know that a friend likes reading rather than spend half an hour thinking what book they would like and worrying I might buy a book they won't read. I get them a gift voucher which they can use at their leisure, or so you think! Not only can they be a convenient and safe option as a gift, many people also like getting them, including yours truly. A survey in the UK found that over 40% of people would prefer to receive a gift voucher rather than a traditional present.

Earlier this week on behalf of the Consumers’ Association of Ireland (CAI) I was advising consumers on Today with Pat Kenny among others to be careful when buying gift vouchers as presents for family and friends. I was pointing out that there are a number of pitfalls which consumers need to avoid when buying a gift voucher so that they don’t end up giving a present with a lot of strings attached. At the moment each retailer and business is free to determine the terms and conditions of the vouchers they sell.

One of the biggest issues with gift vouchers is the expiry date. Its important that consumers check this, ask the salesperson if the voucher has an expiry date and if so when will the voucher expire? Some businesses impose a short timeframe of only 6-12 months, so if the voucher is presented after that date there is no legal obligation on the issuer to accept it as payment. The Fine Gael spokesperson on Enterprise, Trade and Employment, Leo Varadkar highlighted this back in February, with one example where the voucher expired after 3 months. Ideally there should be a date on the voucher and there should be no time limit. If there is an expiry date, best to buy one where it will last for at least 2 years. In many cases retailers will accept a voucher after that date, but I have come across cases where they do not. The National Consumer Agency have a list of expiry dates from some of the larger businesses and retailers.

Its also important to know that if the retailer or business closes down, the voucher cannot be redeemed, likewise if the shop/business changes ownership there is no guarantee that they will accept vouchers issued by previous owners, so if you are giving a gift voucher for a large sum there is a risk involved. A relative of mine got a voucher for a travel agent for €400, but within a few months they closed down and she had no comeback.

In Prague for the weekend, but seeing more of the bars than the shops!

CAI would like the law changed to enhance consumer protection. In a number of states in the US, such as Illinois, New Hampshire and California there are specific laws on gift vouchers. In particular the law should include provisions that all gift vouchers would have a lifetime of 5 years, a requirement that the issuing date and all terms and conditions must be included on voucher and that no fees or charges can be applied. Also where there is a small balance left on the voucher, e.g. 5% of the value of original sum, the consumer has the right to seek a cash refund. And in case people think I am advocating that consumers hold unto their vouchers for 5 years, I am not. It makes sense to use the voucher as soon as possible as with inflation it loses value over time.