Which? warning over Christmas gift cards as consumers left stuck with vouchers for bust retailers

Which? is warning people to think twice about buying gift cards this Christmas after new research from the consumer champion found nearly one in 10 people had received a gift card for a retailer which went bust since the start of the pandemic. 

The consumer champion surveyed 2,000 people to find out the issues consumers have experienced with buying and spending gift cards in the last year – finding an estimated two million people have unused gift cards that they were given in the last year.

Seven per cent had received a gift card for a retailer that had gone bust since March 2020. Almost two-fifths (38%) of these consumers were unable to spend the full balance of their voucher – with an average of £25 left unspent.

One in five (21%) of those with vouchers for bust retailers had a gift card for an Arcadia Group retailer.

Some of these retailers, including Topshop and Miss Selfridge, only allowed customers to pay for 50 per cent of their order total using gift card credit after they fell into administration after Christmas last year. Shoppers had to fund the other half with their own money.

Administrators may refuse gift cards at any point in a bid to save a troubled retailer.

This was the case with Debenhams when administrators decided to stop accepting gift cards just before Christmas on 20 December, 2020. One in eight (13%) survey participants who received a gift card for a retailer that went bust said they had a voucher for the troubled department store in the past year.

The consumer champion’s research also found that some retailers are better than others at stating when their gift cards expire. Over half of people (53%) who received a gift card in the past year had an expiry date clearly stated while a quarter (27%) said the expiry date was not clear on their cards.

Laura (a pseudonym) was disappointed when Marks & Spencer refused to extend the gift card she had been waiting to spend during lockdown.

Her husband bought her a £100 voucher to treat herself in April 2019. Following a car accident in 2015, Laura is her daughter’s carer while also working as a civil engineer.

During the pandemic Laura did not get a chance to spend the gift card. She wanted to wait and spend it on a shopping trip with her daughter when shops reopened. In October she went to spend the gift card and discovered it had expired.

She got in touch with Marks & Spencer customer service to explain her circumstances and see if they could extend the gift card.

Marks & Spencer replied to say their food halls were open and accepting gift cards during the pandemic. They also said she should have partially spent it on something, after which she would have been given a new voucher for the remaining balance with a new expiry date.

She contacted Marks & Spencer on Twitter but was not happy with their response. She said: “All replies have been around what I could and should have done differently. I’ve been made to feel foolish as I didn’t want to spend a voucher intended as a treat for me on weekly food shops or school uniforms.”

The most common reasons respondents gave for not spending a gift card were not getting around to using it (42%) and not finding anything they wanted to spend it on (28%).

Along with checking the expiry date, consumers should also check the small print for any additional fees.

Some cards, such as One4all which can be used with multiple retailers, charge an inactivity fee. After 18 months of owning the card, a monthly charge of 90p is deducted from funds remaining until the card balance reaches zero.

Less than one in 10 respondents (8%) in Which?’s survey, who had received and spent a gift card, said they had to pay to register the card or were charged a transaction fee.

For several years before the pandemic, Which? has advised consumers to think twice before buying gift cards and the same advice rings true this festive season. If people receive a gift card this Christmas, they should carefully check the small print to make sure there are not any surprising fees or charges.

Adam French, Which? Consumer Rights Expert, said: 

“Which? is advising consumers to think twice before buying gift cards this festive season.

“While gift cards might seem like an easy gift for hard-to-please family or friends this Christmas, our research shows you could be left high and dry if the company goes bust.

“If you receive a gift card for Christmas, make sure to carefully check the small print to find the expiry date and make sure you won’t face any unexpected charges if you don’t spend your voucher quickly.”


Notes to editors 

Which? surveyed 2,000 adults in the UK between 15th and 19th October 2021. Fieldwork was carried out online by Opinium and data has been weighted to be representative of the UK population (aged 18+).

Four per cent of those surveyed said they had not spent money on a gift card, which equates to roughly two million of the UK population.

Rights of replies 

An M&S spokesperson said: “Available online and in-store, gift cards are a very popular product with our customers. So we can account for the spend, all of our gift cards carry a two-year expiry date from the last transaction – which can just be a balance check (online, on the phone or in-store), however, the majority of gift cards are spent within the first six months after purchase. Our customer service team have looked into this case and are contacting the customer about a gesture of goodwill.”

One4all Gift Cards told Which? the significant operational costs of processing gift cards are covered if a gift card is spent with a retailer. If it is not spent, a small monthly charge is incurred.

It said most regulated gift cards carry inactivity charges and One4all’s charges are amongst the lowest in the markets it operates in. Most gift cards are spent with its retailer partners within three to six months so the majority of cardholders aren’t charged. It’s very clear about the inactive balance charges, including on the card back, card carrier, its website, within its T&Cs and in several places within the One4all product directory.

One4all is operating a ‘no quibble’ policy for the small minority of card holders affected by inactive balance charges because of government Covid restrictions until very recently and encourage those who have been charged to get in touch. It says customer satisfaction is its top priority and it wants everyone who receives a gift card to enjoy spending it. It will continue to help the minority of One4all customers who may have experienced issues with its gift cards.

Gift Card & Voucher Association said gift cards remain the ideal choice for an ever-growing number of shoppers, with the gift card market being worth approximately £7 billion as of the most recent industry valuation. It said gift cards are also often the most convenient and safe option for shoppers looking to avoid disappointment this Christmas, while significantly cutting down on festive waste and unwanted gifts. It recognises that gift cards play an extremely important role for so many, particularly at this time of year as the festive season approaches. To ensure people get the most out of their gift cards, whether buying or receiving them, it’s created online advice to help people get the most out of their gift.

About Which?

Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.

The information in this press release is for editorial use by journalists and media outlets only. Any business seeking to reproduce information in this release should contact the Which? Endorsement Scheme team at endorsementscheme@which.co.uk.

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