In this post, we explain the gift card refund law UK.
This post was origionally published in 2019, however, since this time we have updated the post to reflect changes in consumer law around gift vouchers.
With so much conflicting information around gift voucher expiry date law it can be confusing and off-putting to companies wanting to start selling gift vouchers.
But fret no more, we are here to clear the air on gift vouchers expiry date law UK.
Companies wanting to offer their products and services in the form of gift vouchers have an easier time in the UK.
For other countries, the laws around expiration dates can get a little complicated.
US companies, for example, need to comply with the federal gift card law. Which has introduced a mandatory minimum gift card expiry date of 5 years.
However, US companies selling experience gift vouchers are exempt from the 5-year expiration date law. See how it gets confusing? Now consider how individual state law affects this! See our post on gift card expiration date federal law for a much more in-depth explanation on the US law in particular.
Ireland has updated their Consumer Protection (Gift Vouchers) Act 2019. Which introduced extra protections for gift vouchers sold on or after 2 December 2019.
Under this legislation, there are some restrictions around selling gift vouchers for consumer protection.
The Irish regulations include:
However interestingly enough, these rules do not apply to electronic money gift cards.
Electronic money gift cards are regulated under the European Communities (Electronic Money) Regulations 2011.
However, Under this legislation, there is no Law on expiry dates for electronic gift cards.
So what is the expiry date on gift voucher law for the UK?
As I mentioned already, UK companies have it good as there is no gift voucher expiry date law.
As it currently stands the Government or the House of Commons has declined all petitions for gift card expiry date legislation. This is due to the Government or the House of Commons not being directly responsible for gift vouchers and their expiry dates. The Parliament stated:
"Decisions relating to the validity of gift cards and vouchers are a matter for individual retailers"
That means as a company wanting to use gift vouchers to sell your products, services and experiences you can determine your voucher validity period.
There is no gift vouchers expiry date law in the UK.
You have full control of your vouchers.
However, there are some things you really should consider for good practice when it comes to selling gift vouchers.
Let’s take a look.
Consumers are more worried about gift cards expiring before they can be used than they were pre-pandemic. Resulting in 26.5% of consumers seeing this as a reason not to buy. This is up from 20.9% in 2020.
- The Gift Card & Voucher Association
But an easy way to combat this is to have a clear expiry date on your gift voucher.
The person buying your gift vouchers is more than likely going to give it to someone as a gift. So it may be well and good informing the purchaser of the validity date, but it’s really the receiver who needs to know when they can spend their voucher by.
By having this information clearly on the voucher itself, whether in the form of paper, card or electronic, you’ll be covering your back in case of any future guest complaints or complications around expired vouchers.
Plus you'll give consumers confidence that they can spend the voucher well within the expiry date time-frame.
From the parliament petitions, it's obvious that consumers have an issue when they feel deceived by the validity of a voucher. Therefore, the easy solution to this is for retailers to be transparent about the expiry details on their vouchers.
State in small print on your voucher your terms and conditions around the voucher. Include the expiry date, where and how to book (if for a service), that it is not refundable and whatever else you feel is necessary to make clear.
For example, you may want your vouchers with a monetary value to be spent all in one transaction and not part-redeemed.
There are so many vouchers which expire. Many people put them away in a ‘safe place’ but out of sight out of mind found again too late.
In 2017, £300 million worth of gift vouchers bought went unspent according to official Gov.uk reports.
With the gift voucher industry worth $405.17 billion, that number of unspent vouchers will be considerably much more now.
Here comes another opportunity for you.
Consumers not wanting to miss out on their gift voucher experience, will welcome the prospect of purchasing an extension voucher at a fraction of the worth of the voucher.
Let’s consider this scenario:
Mrs Marshal received a full body massage voucher purchased by her friend for £100. She found the voucher over a year later but noticed the voucher had expired a month ago.
Upon calling the spa to try her chances of using an expired voucher, she was met with a ‘not possible, but for £50 you can purchase a 3-month extension voucher’.
This news is a pleasant surprise for Mrs Marshall, as she can
- relieve her guilt for forgetting to book her treatment within the year.
- As she didn’t buy the voucher to begin with, she can now get a £100 worth massage for half the price.
This comes as a double benefit for you, as you not only sold a £100 voucher but an additional £50 voucher off one service.
And who knows, she may even buy an additional massage voucher for a friend to join her for the day. It happens!
For monetary vouchers (vouchers redeemable for a certain amount, e.g. £50 gift voucher) a 12-month validation period is usually sufficient.
For services (depending on your seasonal offerings and experiences) 6 months is a reasonable length of time to set your expiration date.
Anything less than this can make it tricky for your future customers to find a suitable time to book unless it is for a seasonal event e.g. (Such as a Christmas or Easter event etc). In these circumstances, it is perfectly acceptable to have the expiration date ends when your offering is no longer available.
Just be sure to make this extremely clear for the purchaser when buying the voucher and for the receiver to spend the voucher.
Although you are under no legal obligation to reimburse a clearly communicated expired voucher, there may be some extenuating circumstances where you’ll be more flexible.
It can be good practice to review each individual's circumstance revolving around expired gift vouchers. You may want to implement your own returns or exchange procedure in-house for these rare scenarios.
You can make a general rule of no refunds, but for some circumstances keeping the customers' loyalty may be of higher value to you.
In these circumstances, it may be a good idea to have an extension voucher issued or to book direct with a manager to get the voucher service booked in.
The voucher industry has seen a market growth of 27.1% of shoppers buying a gift voucher for someone at Christmas 2021. This is up significantly since the time we first published this blog post when figures were at 11.74% in 2018.
Thus, making gift vouchers the fastest-growing retail UK segment in the consumer spending industry.
As a result gift vouchers are expanding into more markets, within the service industry in particular. Many companies who offer services are expanding their sales through selling ‘gift experiences’. See our post on how the experiences in the service economy is rising.
Research from the Gift Card Voucher Association 2022 has found that gift experiences are fast being the preferred type of gift voucher.
Leisure has paved the way for voucher growth for the third period running by 7.6%! Whereas retail has contracted in growth by -3.7%.
It's clear that businesses in the hospitality, travel and entertainment industries are in a major growth stream. - Especially since Covid.
If you’re a company wanting to make more revenue through selling gift vouchers and gift experience vouchers, then don’t wait! Vouchers are not just limited to retail stores or hotels anymore. If you offer any kind of service or experience, then this is the next step for you.
Jump on this fast-growing trend and boost your revenue.
We hope that you are clear with the expiry date on gift voucher law here in the UK.
If you’re a business wanting to introduce gift vouchers for your services or experiences, then implement it the best way using a management system that does it all for you.
Here at Enjovia, we not only allow you to have full control of your voucher store but we have an easy-to-use interactive system where you can create, redeem, manage and track vouchers, gift cards and more. Check out our post on the changes we've made to our new system for more information on what you can get from using our voucher solutions system.
Contact us at Enjovia where we can help facilitate and support all your gift voucher system requirements.
