Worthless gift vouchers?

Posted 07/02/2013

We have all heard of the likes of HMV, Jessops and Comet going into administration, but the refusal of these companies to accept gift vouchers has attracted media attention.

These companies – along with many others that have gone into administration – were selling gift vouchers right up until the administrators were appointed. Customers have then been told they cannot redeem their gift vouchers in stores and they are left with worthless pieces of paper or plastic.

Upon purchasing a gift voucher, a contract is made with the company which means the purchaser loans the company the money until the gift voucher is redeemed. Gift vouchers provide the company with immediate cash income, but offer no security to the customer once the company enters into administration as the customer is an ‘unsecured creditor’.

It is up to the administrators to decide if gift vouchers should be accepted. With HMV and Comet, the administrators began to accept gift vouchers again once the finances had been reviewed. People with Jessops vouchers, however, have been left out of pocket.

If a gift voucher is purchased by credit card and is for £100 or more, the customer is entitled to a refund from the credit card company. However, the majority of vouchers purchased are for less than £100 and there is no legislation in place to protect these customers. In light of the recent media attention surrounding this problem, there is renewed hope that legislation will be introduced to offer protection to customers, but this may take some time.

Customers who find themselves with unredeemable vouchers should keep hold of them just in case the administrators decide that they can be accepted in stores. In the future, it is likely that customers will think seriously before purchasing gift vouchers and may look to alternatives such as giving cash or cheques instead.