Gift vouchers: the gift that keeps on taking away

Despite the fact that the voucher industry in Ireland is worth hundreds of millions of euro, it is almost completely unregulated. Retailers can impose all sorts of ridiculous and ridiculously consumer-unfriendly terms and conditions on their sale and then hide their stupid rules deep in the terms and conditions, and there is virtually nothing we can do about it.

Vouchers can come with expiry dates of six months – or even less than that. Shops, restaurants or airlines can refuse to give you change – even in voucher form – if you buy something for less than the full value of the voucher. They can stop you using your voucher during sale periods and can refuse to accept two vouchers worth €50 each for a product or service that costs €100 – we're looking at you, Aer Lingus.

They can also start charging you if you don’t use your voucher within their arbitrarily imposed timeframe.

Somewhere between 15 and 20% of all the vouchers gifted in this country are never cashed in

What is worse than all of the above is that a retailer can sell you a voucher worth hundreds of euro one day and go out of business the next, leaving you with nothing except a worthless piece of paper or plastic, and with absolutely nothing by way of comeback.

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Of course, none of this is is news. The insanity of the Irish gift voucher system is something Pricewatch has been writing about for almost 15 years, yet despite our endless moaning (which always reaches a predictable crescendo at this time of year) – and, it should be said, the moaning of others – nothing has ever been done by the powers-that-be to help consumers out.

Vouchers might not be the most imaginative or the most thoughtful present in the world – in fact they are just a hair’s breadth away from cold, hard cash – but they still remain enormously popular in this country; more than half of us will buy at least one as a gift this Christmas.

That is why the sector is worth a staggering €350 million a year, with every business from record and book shops to spas, restaurants and hotels keen to flog this little cash cow.

Never cashed in

Because of the restrictions retailers are allowed to impose, and because of our own idiocy, somewhere between 15 and 20 per cent of all the vouchers gifted in this country are never cashed in. That means that, as a nation, we collectively waste as much as €70 million every single year by not spending the gift vouchers we get.

And if that figure does not sound sufficiently depressing, how about this one: between us all, we have turned our noses up at the guts of one billion euro since Pricewatch first started writing about vouchers.

Things were supposed to change in 2015. That was when then minister for enterprise Richard Bruton announced details of a Consumer Rights Bill which, he promised, would address "a basic imbalance" between consumers and retailers and service providers.

Among the elements of the Bill, described by Bruton as the most sweeping reform of Irish consumer law in decades, expiry dates on gift vouchers were to be scrapped. Bruton got a lot of credit for his Bill at the time – even Pricewatch hailed it as a great step and publicly commended him for taking it.

But he never actually took the step, and he never delivered on his promise; his plans have since disappeared without a trace.

The Labour Party also made an attempt to bring about legislative change back in 2009 when it presented the Consumer Protection (Gift Vouchers) Bill to the Seanad. That bill aimed to regulate the sale of gift vouchers, but it was rejected by the government of the day. We were all too concerned with our economy imploding to ask why.

The body that was formerly known as the National Consumer Agency and is now the Competition and Consumer Protection Commission has also had a say on vouchers. It has called for guidelines on the use of gift vouchers and recommended that no time limit be applied for redeeming such things. It has also asked retailers to scrap restrictions placed on using them during sale times and other promotions.

But it has never campaigned for legislative change. And, other than releasing the odd press release on the dangers of dodgy vouchers, it has achieved little in this sphere.

It is a different story in some other countries, where regulators and lawmakers have brought recalcitrant retailers to heel, with the most notable success being the US, where federal laws now prohibit gift cards or vouchers expiring before five years from the date of purchase.

Note of exasperation

It is not hard to detect the note of exasperation in consumer advocate Dermott Jewell’s voice when we ask him about vouchers. Again. The Consumers’ Association of Ireland (CAI) spokesman has been complaining about the “outrageous rules which allow retailers to fleece consumers” for even longer than Pricewatch.

Last August the CAI, frustrated by a lack of progress on the issue, wrote to the leading retailer representative bodies – Retail Excellence Ireland and Retail Ireland – asking them to agree to a six-year limit on all vouchers sold by their members.

“Irish consumers have, for too long, been issued with credit notes and vouchers – paid for in hard cash – with expiry dates that, in reality, devalue their money within an unacceptable and retailer-determined three-, six- or 12-month period of time,” says Jewell. “After that period of time the note becomes of nil value – a worthless piece of paper – but no loss to the retailer with money-for-nothing safely in the bank.”

He says he was not surprised when both the retail groups completely ignored the CAI’s pleas.

The Social Democrats have now stepped up to the plate. Irish consumers continue to be “fleeced” by merchants selling gift vouchers with overly restrictive terms and conditions while the Government sits on its hands waiting for an EU ruling, the party said when bringing a new Bill before the Dáil last month.

The Bill is the baby of Kildare North TD Catherine Murphy, who wants to stop retailers imposing expiration limits of less than five years on vouchers, and prohibit a range of charges connected to their use. The new legislation also seeks to prevent companies taking money off card balances if they are not used by certain dates, and promises to ban charges for the repayment of any credit balance to gift vouchers.

“We believe there is no reason for any further delay. Customers are being fleeced while we wait on the Government to act. If the European Union requires further changes then let those changes be made whenever there is a final decision,” Murphy said at the time the Bill was introduced.

Most of us are too polite to tell someone who has given us a gift that there is an issue after the fact

“This is an issue that comes up quite a lot, and it seems to me that there are some retailers who don’t treat vouchers like cash and that leads to people getting caught out,” she told Pricewatch last week. “When they issued a five-year limit on expiry dates in the US the problem of wasted vouchers simply fell off a cliff, so even if we were able to get that one piece of legislation through it would make a real difference.”

Murphy says it is too easy to say people need to check the terms and conditions before buying. “How many of us have been queuing for ages in a shop in the run-up to Christmas trying to get the last few bits and pieces? The last thing we are going to do when we eventually get to the top of the queue is talk about terms and conditions.

“And, given the nature of vouchers, it is not usually the person who has paid for them that experiences the problems, and most of us are too polite to tell someone who has given us a gift that there is an issue after the fact.”

So where is Murphy’s Bill today? It has missed the Christmas deadline, so nothing will happen before the big day. It is due a second reading in January, after which it might make it to committee stage. After that it might make it to full vote of the Dáil. And after that it might make it into law in time for next Christmas. “There is a lot of good will towards it and it is very simple, and sometimes the simplest pieces of legislation work,” she says.

Fingers crossed.

Get the most out of your gift vouchers

Do always check the terms and conditions when you are buying them. This check does not have to be exhaustive, but at least ask the seller about expiry dates and what happens to any unused part of a voucher, and whether the voucher can be used in every outlet if the shop is part of a chain.

Don't assume that there is no expiry date on a voucher just because it is not listed either on the voucher or even in the terms and conditions.

Do tell the person you are giving the voucher to about those T&Cs – they, far more than you, need to know about them.

Don't expect a shop to replace a voucher if you lose it. It's just like losing cash, so keep the voucher somewhere safe.

Do buy vouchers from reputable retailers or vouchers than can be used across multiple shops. If you spend €300 on a voucher sold by a bloke who is selling TVs from the back of his van, do not be surprised if cashing it in proves tricky .

Don't expect to get anything back if you get a voucher for a store that closes down before you get to use it. If that happens, you become an unsecured creditor and you take your place at the back of the queue – typically behind the taxman, staff, banks and bigger creditors.

Do register your claim for the value of your voucher with any liquidator.

Don't forget that some vouchers start imposing service charges if they are not used within a certain timeframe. These charges can drain an entire gift card remarkably quickly.

Do use your vouchers as quickly as possible. Far too many of us sit on vouchers for far too long, waiting for the perfect purchase. The absolute best way to ensure you don't get caught out by expiry dates is by using it.