Contact Consumer Protection
Tel: 1300 30 40 54
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With Acting Commissioner for Consumer Protection David Hillyard
The gift card industry is a growing one. We used to purchase gift vouchers directly from the shop or business where they would be redeemed, but it is now commonplace for department stores and supermarkets to have a variety of gift cards for other places on display near the till.
In 2015 Consumer Protection received 74 complaints about gift cards/vouchers, with 30 coming in the first quarter of the year, post-Christmas. We regularly highlight, through the media and social media, some potential problems with gift cards or vouchers. One of the issues we frequently warn of is business collapse, which became a reality for many Western Australians when electronics retailer Dick Smith went into receivership on 5 January 2016.
Holders of Dick Smith gift cards, many of whom had received theirs as a Christmas present, became unsecured creditors when voluntary administrators were appointed. Any claims for the outstanding dollar value must be lodged via a hotline or email address (1300 853 481 or firstname.lastname@example.org). If payment was made by credit card or by selecting ‘credit’ with a debit card, Dick Smith gift card purchasers can contact their credit card provider and request a chargeback. Unfortunately this opportunity does not exist for those who paid by cash or eftpos. Dick Smith gift cards bought from Coles, Woolworths or Big W can be exchanged for a gift card of equal value for that particular supermarket or store, subject to proof or purchase being provided as part of a redemption process.
Consumer Protection’s new position, in light of the Dick Smith scenario, is that Western Australians should consider only buying gift vouchers with credit cards or by selecting ‘credit’ on a debit card, so that chargeback is an option if the business goes bust.
We also want the community to think about whether it is better to give cash as a present or a gift card that can be redeemed at a number of outlets (some shopping centres sell these vouchers and they can be used at a variety of stores within the complex). Cash may seem less personalised than a gift card or voucher but the receiver is guaranteed to be able to spend the money and will not be restricted by terms and conditions or an expiry date.
If you are going to buy a gift card you have to ask yourself if you know for certain that the business is not in financial trouble and will still be around for the voucher to be used or spent without restriction. For example when Laura Ashley’s Australian clothing and home wares stores went into administration on 7 January 2016 the requirements for redeeming a gift card changed. Laura Ashley gift card holders are now required to spend double the face value in order to redeem it e.g. spend $200 in store to redeem a $100 voucher.
Sometimes the prospect of a business winding up will be predicted in the media, such as within the business section of a newspaper or website, so it’s worthwhile keeping up-to-date with what’s happening in the marketplace. Staying informed could save you dollars by alerting you ahead of you buying a gift card from a troubled retailer, or letting you know that a gift card you have received could soon become worthless.
Generally we recommend that anyone who receives a gift card should redeem it as soon as possible after receipt. It’s believed Australian retailers make hundreds of millions of dollars from unclaimed vouchers every year, with consumer surveys suggesting in excess of three out of ten people forget to use their gift card before the expiry date. One way to prevent this is to download Consumer Protection’s free app iShopWA and use its gift voucher expiry date reminder function.
Consumers with complaints relating to gift cards should first try to resolve the issues with the business in question and in the case of unresolved disputes contact Consumer Protection by email: email@example.com or by calling 1300 30 40 54.
July 2020: Please note the iShopWA app is no longer supported. Consumer Protection recommends the ACCC Shopper app, which offers similar functionality and is available in both the App Store and Google Play.