Kiwis losing $10 million a year on expired gift cards

More than 70 per cent of shoppers regularly buy and receive gift cards but Consumer NZ estimates one in five expires before it can be used. Photo / Richard Robinson

Kiwis are losing up to $10 million a year on expired vouchers and gift cards, says an independent watchdog.

A damning Consumer New Zealand survey says the public is having millions of dollars in store credit rendered worthless each year - and the watchdog isn't happy about it.

Consumer NZ has written to an array of retailers - 10 major operators including Briscoes, Countdown, Kathmandu and New World - requesting they take the lead and scrap expiry dates on gift cards.

The retailers have been given until September 19 to respond to Consumer NZ advising of their position.

If the retailers don't act, Consumer NZ chief executive Sue Chetwin says she will take the issue to Trade Minister Todd McClay, amid concerns some businesses are using the expiry system to earn revenue without having to yield goods or services.

"Unfair expiry dates mean many consumers are getting stuck with cards they can't redeem," Chetwin said. "Based on the typical gift card value, we estimate consumers could be losing as much as $10 million annually.

"In our view, retailers know people may not always use gift vouchers - so not only do they get the money, they get to keep the goods.

"We would like to see retailers decide themselves to change the way they work. And if they don't, we will push it a bit harder with the Minister to see if there's something that can be done under Fair Trading."

Consumer NZ's data is the result of an online survey, a "nationally representative sample of 1029 New Zealanders" aged 18 and over.

According to the research, more than 70 per cent of shoppers regularly buy and receive gift cards. Chetwin says their popularity and "quick fix" quality make them valuable for consumers, however "one in five gift card recipients had been left empty-handed".

Consumer NZ reviewed 60 gift cards and found more than half expired after just 12 months.

"The meanest gift card was Ticketek's - it runs out after just six months," Chetwin said.

With hardware store Bunnings and menswear outlet Barkers among retailers who don't place deadlines on gift cards being redeemed, Chetwin says others need to follow suit.

General manager, Jacqui Coombes, said Bunnings removed timeframes on gift cards more than two years ago. As well as giving customers more flexibility, Coombes said removing expiry dates also made life easier for staff.

"We decided it was easier for customers, so that they've got trust in the gift card, and also for our team because they don't have to deal with expiry dates, they just value them like cash," Coombes said.

"It works well for us and while most people spend within a relatively short period, you do get some that have been in a drawer for years. It's cool that you can still give people the value of that gift that's been given to them."

The Weekend Herald wrote to all 10 retailers yesterday, asking why they impose expiry dates and whether they would reconsider.

Ticketek said "we are happy to listen to feedback" while Countdown, Paper Plus, Scentre Group (Westfield), The Warehouse (Noel Leeming) and Foodstuffs (New World) said they will consider Consumer NZ's request.

Earlier this year, Dick Smith gift vouchers became worthless pieces of plastic following the appointment of receivers to the embattled electronics retailer.

Receiver James Stewart, of Ferrier Hodgson, said vouchers could not be honoured and deposits would not be refunded due to the financial circumstances of the company.

Consumer NZ calls for end to gift card gotchas

• Consumer NZ says up to $10m a year unclaimed in expired gift cards
• 77 per cent of consumers regularly receive gift cards.
• $50 to $70 is the most common gift card value.
• 24 per cent of gift card users have been stuck with a card they can't fully redeem because it's expired or the store has gone out of business.
• the majority of shoppers unable to redeem a gift card had more than $20 still unspent.
• 50 per cent of gift card users have experienced problems with a card, including finding it hard to check the balance (28 per cent), only being able to use the card at a limited number of stores (19 per cent) and struggling to find something to buy (18 per cent).

SOURCE: Consumer NZ

Data is from an online survey of a nationally representative sample of 1029 New Zealanders aged 18 years and over. The margin of error is +/-3.06 percent.