Not such a wonderful gift?

WITH THE number of sleeps until Christmas rapidly diminishing, it's hardly surprising that over the next 72 hours thousands of stressed-out shoppers will fall back on gift vouchers to sort out their most pressing stocking-filling dilemmas, writes CONOR POPE

While they’re just a step up from cold hard cash – the one gift most people are extremely reluctant to give at Christmas time – they do serve as an ideal last-minute present and one which will be greeted with a broader smile than some ill-advised talcum-powder-aftershave combo found gathering dust in your local pharmacy or a pair of absolutely hilarious socks featuring Homer Simpson saying “D’oh!”.

More than 50 per cent of adults plan to give vouchers as presents this year, according to Deloitte’s recent survey of all things festive, and a similar number of people say vouchers are what they most want from their nearest and dearest.

The voucher business has grown to be worth in excess of €300 million in Ireland each year, but vouchers are not entirely problem-free and people – including Pricewatch – complaining about the expiry dates on many of them – has become as much a part of Christmas as It’s A Wonderful Life. Many vouchers have expiry dates of just six months after purchase, which may explain why as many as 20 per cent of vouchers – or nearly €70 million annually – are never redeemed.

“We have been calling for action on vouchers for years and nothing has been done at government level – and I can’t help thinking it is just down to laziness,” says Dermott Jewell of the Consumers’ Association of Ireland (CAI). “We highlight the problem of the very short shelf life of some vouchers every year, but nothing changes.” The CAI wrote to the Minister for Finance, Brian Lenihan, two weeks ago, asking him to follow the lead of the current US administration and introduce a five-year standing term on all vouchers, and is still waiting to hear back from his office.

Jewell is convinced that the situation will not change unless the Government acts. “It is an easy way for retailers to make quite a lot of money and I am quite sure that many retailers who sell vouchers in the run-up to Christmas are rubbing their hands with glee because they know that they will never be redeemed,” he says.

The Labour Party made an attempt to bring about legislative change earlier this month when it presented the Consumer Protection (Gift Vouchers) Bill 2009 to the Seanad. The bill, brought forward by Senator Brendan Ryan, aimed to regulate the sale of gift vouchers, but its rejection by the Government represented “a missed opportunity by the Government to protect the consumer”, he claims. “I introduced the Bill because, in practice, many consumers have problems with some gift vouchers as they may have an expiry date that may have passed by the time there is an attempt to redeem them. Under the Bill it would be a prohibited commercial practice to sell or offer for sale a gift voucher with a redemption period of less than five years. The net effect would be that all vouchers would remain valid for five years following the passing of the Bill.”

He says similar legislation has been introduced in other jurisdictions. The US has moved at federal level to prohibit gift cards or vouchers expiring before five years from the date of purchase and Canada has begun the process on a state-by-state basis. “The Government’s contention that it is precluded by EU law from accepting our Bill is a little hard to swallow, and a lame excuse,” he says. “However, our legal advice was that approval could be sought post-enactment, not necessarily at the time of publication. Our advice is that this may be an issue, but that it can be overcome.”

According to Marie Hurley, director of policy analysis and communications with the National Consumer Agency (NCA), common sense and fairness on the part of retailers would be preferable to changes in the law.

“Rather than legislation we would prefer to see traders operating a reasonable policy and to recognise that there needs to be fair play,” she says, adding that while as many as 50 per cent of retailers impose limits on their vouchers, “more and more companies are adopting a healthier approach” and extending the time limits. “The trend is encouraging, but a lot of people are still not asking the right questions when it comes to buying vouchers. Maybe the people who are giving the gifts aren’t as alert to the risks.”

In addition to having time limits, some vouchers cannot be used during sales. “I think that is particularly pernicious,” Hurley says. She believes that buyers should also ask whether change will be given if vouchers aren’t used in full, as retailers are under no legal obligation to offer change.

“Realistically, people don’t want to be bothered going through four pages of terms and conditions when they are buying a voucher, but if there is one question people should definitely ask, it is about the expiry date,” she says.

The problem of expiry dates has been joined by another, potentially greater problem which is a sign of our cash-strapped times.

“I am sending this e-mail with tears rolling down my face,” began recent correspondence from a Pricewatch reader. After she gave birth to twins, her husband gave her €750 worth of Budget Travel vouchers, which he paid for in cash, the idea being that the couple could use the vouchers late next year for their first family holiday.

It wasn’t to be. Budget Travel went into liquidation, and with the stroke of a judge’s pen the vouchers became worthless. People who had paid for holidays with the tour operator were covered by the company’s bond, but people who paid cash for vouchers have no choice but to join the queue of unsecured creditors and hope some money will be refunded.

But as the term suggests, unsecured creditors are a long way down the pecking order when it comes to getting access to any surplus funds available after winding up.

If a credit card had been used to buy the vouchers, it would have been possible (if not exactly easy) for this reader’s husband to get a refund via the chargeback system credit card companies operate under.

“We receive frequent inquiries about what happens with a gift voucher issued by a business that has ceased trading,” says Ann Fitzgerald, the NCA’s chief executive. “In these difficult economic times, this is likely to become a more common concern. Unfortunately, gift vouchers do not benefit from any special protections in the event of the closure of a business.”

The best advice the agency can give is to urge consumers who get gift vouchers to use them quickly. It may seem like stating the obvious but the number of Irish people who let vouchers go uncashed is remarkable, and as many as 20 per cent of all vouchers are never cashed, giving retailers in this country a huge windfall every year.

“It needs to be acknowledged that we are living in changing times and people need to be careful who they buy vouchers from,” says Dermott Jewell. “Even if they take the greatest of care they cannot be sure the company they buy vouchers from will still be in business, so it might be that people need to steer clear of vouchers altogether this year.”