Gift vouchers are always a popular present at Christmas due to their convenience. But it's important to know the rules and your consumers rights surrounding them so that you're not left short changed.
A recent study by PayPal found that 46% of Irish consumers prefer to give cash or cash equivalents like gift cards to family and friends for Christmas rather than toil away trying to pick out, order, pay for and collect gifts.
This means there’s a good chance you'll either be giving or receiving at least one gift voucher over the festive season.
But be aware that the rules and entitlements around gift vouchers can be surprisingly complicated. And it doesn't help that people often don't realise what constitutes a gift voucher in the first place.
So to ensure you're not left out of pocket, read on...
What is a gift voucher?
The answer isn't quite as simple as you'd think but it's important to know as your rights will depend on what you have.
A gift voucher or gift card is when someone prepays for a transaction with a company and then someone else is the beneficiary of that transaction. The beneficiary can generally use the value of the gift card for any product or service offered by the company.
An example would be a €50 gift voucher for Zara or Penneys.
There are usually (but not always) no extra fees or charges. In other words, a €50 Zara voucher costs the buyer €50 and gives the recipient €50 to spend in any Zara store or online.
Shopping centre gift cards, which can only be used in the shopping centre itself, and not in shops elsewhere, are also considered gift vouchers.
However many popular 'gift vouchers' such as the One4All card or cards for use in multiple shops in different places are in fact electronic money or 'e-money' cards. In this case, the card is treated like a preloaded debit card.
And although it might feel like gift vouchers and e-money cards work the same, and they kind of do, the distinction can be important, especially if you lose it...
Your rights with a gift voucher
The Consumer Protection (Gift Vouchers) Act 2019 introduced several important changes to gift card regulations in Ireland. Here are the key points:
1. Expiry dates
Gift vouchers sold after 2nd December 2019 must either have no expiry date or be valid for at least five years after purchase.
2. Usage flexibility
Gift vouchers don't all have to be spent in the one go. You must be allowed use your voucher for multiple purchases.
And you can use more than one gift voucher at a time. For example, if an item costs €100 and you have two €50 vouchers, you can use them both to pay for something.
3. Refunds
If there's more than €1 left on your gift voucher after a purchase, the seller must refund you the balance. This can be done with cash, an electronic transfer, or another gift voucher.
However a downside of a gift voucher is that it operates just like cash. So if you lose the voucher, then tough luck really. The shop doesn't have to replace it.
And if the shop goes out of business, you're unlikely to get your money back as you'll become a creditor and have to wait in line behind banks and Revenue to be refunded by the receiver of the business. Though you may be able to get your money back if you paid by debit or credit card by initiating a chargeback.
You also can't redeem the voucher for cash or exchange it for another shop if you don't like shopping with the retailer in question.
Your rights with an e-money card
If you have an e-money card then your rights fall under the European Communities (Electronic Money) Regulations 2011. These are typically more generous. However these cards often come with more fees than gift vouchers with a fee for buying and topping up the card with money as well as fees for the recipient if they don't use the card within a set timeframe.
Many popular 'gift vouchers' are actually electronic money gift cards.
1. Expiry dates
Electronic money (e-money) cards don't expire, meaning consumers can in theory use their funds without worrying about expiration dates. However you need to be mindful of inactivity fees...
2. Fees and charges
E-money cards must clearly disclose any fees or charges associated with the use of them. Hidden fees aren't allowed, ensuring transparency for consumers. But remember, just because they’re transparent, doesn’t mean they don’t exist. Pay close attention to fees - One4All charges an issuance fee of €2 for your first card and 50c for each one thereafter.
There are also inactivity fees. One4All charges €1.45 a month after the card has been inactive for 18 months (this means either no spend or no top-up). This will keep being charged on the card each month until the balance runs out.
3. Redeemability
Consumers have the right to redeem their e-money at any time, either in part or in full, however a fee may apply.
4. Safeguarding of funds
The seller (e.g. One4All) is required to safeguard consumers' funds by keeping them separate from the company's own funds, providing an extra layer of protection.
A benefit of e-money cards is that you have more options if you lose of misplace them, especially if you register the card when you get it. But there may be a small fee for this. Also, some cards are solely digital and so losing them is impossible! There should also be no fear of the retailer going bust.
What else isn't a gift voucher?
If you return an item to a store and get issued with a credit note or a voucher instead of a refund, then different rules will apply. A credit note may need to be used within a month or a year for example.
Also, confusingly, online deal vouchers, or 'discount deals', bought for a specific good/service or experience that must be used within three months or on a specific date aren't considered gift vouchers under the legislation. This can include things like spa experiences, meals, or a hot air balloon ride. But sometimes it can be difficult to tell if you have a gift card, that you have five years to use, or an online deal voucher, that might only give you three months or less.
So what to consider when buying or getting a gift card or voucher?
As is so often the case, drill down into the Ts and Cs as soon as you get a gift card or voucher, no matter what the type, so that you don't get left short changed.
1. Expiry date
Check when the card or voucher must be used by. The expiry date doesn't have to be printed on the gift voucher itself but the business must inform you of it by email or in writing. Don't presume you have five years to use it.
2. Inactivity fees
Check if there's a monthly fee or charge for not using your voucher or gift card after a certain timeframe.
3. Replacement options
Check if you can replace your card/voucher should you lose it - and register your card as soon as possible if you can.
4. Check where it can be used
Don't presume a voucher can be used in all the main retailers - some may not accept your voucher at the till which can cause embarrassment when you go to pay for something.
On the flip side, some gift cards might be bought in one shop e.g. Zara, but be available to use in its sister outlets too e.g. Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Zara Home. So you may have more options than you think.
