'£250m wasted per year' on unused gift cards
- 7 April 2012
- From the section UK
People in the UK waste £250m per year on store gift cards they do not use, according to industry figures.
Annual sales of the cards are worth more than £4bn. About half are given as personal gifts, the rest by business.
But 6% of the value on the cards is never used, partly because they expire after a fixed period which can be as short as a year.
The gift card trade body says many shops extend the expiry date every time they are used.
Speaking on BBC Radio 4's Money Box Andrew Johnson, director general of the UK Gift Card and Voucher Association, said: "For a retailer, a gift card or voucher remains a liability on the books so at some point it makes good financial sense to remove that liability."
The association says that in 2011 sales of gift cards totalled £2bn in retail stores, with a further £2.18bn bought by businesses for promotions or rewarding staff.
Some of the unused £250m represents change on the card. For example, a £20 card may be used to buy something for £18.99 - leaving £1.01 to spend later.
But many people do not realise there is an expiry date, often because the information is in very small print on the back of the card.
Mick Wannell told Money Box he was surprised when he could not use his card.
"It's point six of the small print," he said.
"When I tried to use it I was told it was empty. But it had only timed out because the card had not been used for two years. But there was unspent money."
Mick's card was typical. There will be a warning in the terms and conditions on the back of the card that it expires "12 months after purchase" or "two years after it was last used".
But the print is usually small and there is never a date indicating exactly when the value will vanish or when it was bought.
Normally, the only way to find out the expiry date is to visit the retailer and ask. Some may provide the information online or on the phone.
Mr Johnson said most people use their cards within six months of receiving them.
"Retailers would much rather you were in the store spending the money," he said.
"Most people who spend a gift card in a store spend another 40%."