Gift cards, gift vouchers, gift certificates, and gift experiences have become increasingly popular options for gifting. They offer flexibility and choice to the recipient, allowing them to select their desired items or experiences.
This comprehensive guide will delve into the gift card refund law. Gift voucher rules in the UK, consumer rights regarding gift vouchers, and more.
For the gift card Law in the US, please see our post, gift card expiration law.
Before exploring the legalities, let's first understand the various types of gift cards available in the market. There are four primary types:
Gift experiences are a service consumers can redeem in exchange for a token bought beforehand. The token can be a paper card or digital code sent to an email address.
Gift cards are monetary value plastic cards used to purchase goods from a retail store.
However, in the US, they can also represent the exchange of services in the form of ‘experiences’. (As the gift experience description fits above.)
Gift vouchers are a term most frequently used in the UK. They can be either a gift experience or a monetary gift card. They are used interchangeably.
In the US, gift certificates are used the same way gift vouchers are used in the UK.
A gift coupon is a voucher that entitles the holder to a particular discount or offer.
Similarly, gift coupons like gift vouchers offer discounts or special deals. Businesses issue gift coupons to promote their products or services, while consumers purchase gift vouchers as gifts for others.
Now that we understand the different types of gift card names, let's delve into the regulations surrounding them.
For ease of reading this blog post, we will interchange the terms gift cards and gift vouchers.
Companies can find the rules around gift vouchers confusing and discouraging due to conflicting information.
Companies wanting to offer their products and services through gift vouchers have an easier time in the UK. There is no law in the UK set around the expiration date on gift vouchers.
The laws around expiration dates can get complicated for other countries.
US companies must follow the federal gift card law, which sets a minimum expiry date of 5 years for gift cards.
However, US companies selling experience gift vouchers are exempt from the 5-year expiration date law. See how it gets confusing? Check out how state law affects gift card expiration dates! For more details on US federal law, read our post on gift card expiration date federal law.
Ireland's updated Consumer Protection Act 2019 provides extra safeguards for gift vouchers sold from 2 Dec 2019.
Under this legislation, some restrictions exist 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, this legislation has no law on expiration dates for electronic gift cards.
Gift vouchers must include accurate information about terms and conditions, including expiry date, as per the act. Misleading or inaccurate information on a gift voucher can entitle the consumer to a refund or replacement.
Don't despair yet if you find yourself with an expired gift voucher.
While the regulations surrounding expired vouchers can vary, it is worth exploring your options.
Sometimes, retailers may still accept expired vouchers as a gesture of goodwill. Tr contacting the retailer directly and explaining the situation to see if they will honour the voucher.
Retailers may offer extension vouchers for consumers to extend their product usage for a few more months.
If your gift card has expired, there are a few steps you can take to recover the value potentially:
Reach out to the retailer and explain the situation. Some retailers may agree to extend the expiry date or provide an option to extend the gift card usage by selling a gift card extension voucher.
Review the terms and conditions of the gift card to ensure that it was sold with a specific expiry date.
Be familiar with the Consumer Rights Act 2015 and the Consumer Protection (Gift Vouchers) Act 2019.
In the UK, there is no law on the expiration dates of gift vouchers.
This means that retailers can sell gift vouchers for their products and services and can set their expiration date as they please.
The numbers on a gift card typically serve different purposes, including identification, security, and transaction tracking. Here is a breakdown of the common numbers you may find on a gift card:
This unique number identifies the specific gift card. It is often used for tracking purposes and to link the card to its associated value. Some companies may also use an additional QR code to make the redemption process quicker and smoother.
Some gift cards may have an activation code that needs to be entered or scanned to activate the card. This code ensures that the card is valid and ready for use
Yes, in the UK, putting an expiry date on a gift voucher is legal. There is no required amount of time before the voucher must expire. This means that if customers fail to spend their vouchers within the required time frame, the company will keep the full revenue from the voucher.
Gift cards can expire in the UK. However, there is no act requiring companies to set an expiration date for a certain length of time.
Unlike in other parts in of the world like the US or Ireland.
Enjovia is a leading provider of gift card and voucher solutions in the UK.
From articles to FAQs, Enjovia provides valuable insights into the regulations and best practices surrounding gift cards and vouchers.
Enjovia's website offers a helpful knowledge base on gift card refund laws. For US gift card law, see here.
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
However, an easy way to combat this is to have a clear expiration date on your gift voucher.
The person buying your gift vouchers will more than likely give it to someone as a gift. So it may be good to inform the purchaser of the validity date, but the receiver needs to know when they can spend their voucher.
By clearly displaying this information on the voucher itself, whether paper, card, or electronic, you’ll be covering your back in case of future guest complaints or complications related to expired vouchers.
Plus, you'll give consumers the confidence to spend the voucher well within the expiration date.
From the parliament petitions, it's obvious that consumers have an issue when they feel deceived by a voucher's validity. Therefore, the easy solution 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 as a business owner.
Consumers who do not want to miss out on their gift voucher experience will welcome the prospect of purchasing an extension voucher at a fraction of the value of the voucher.
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, you may be more flexible in some extenuating circumstances.
It can be good practice to review each individual's circumstance regarding expired gift vouchers. For these rare scenarios, you may want to implement your own returns or exchange procedure in-house.
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 issue an extension voucher or book directly 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 from when we first published this blog post, when figures were at 11.74% in 2018.
Thus, gift vouchers are the fastest-growing consumer-spending segment in the retail UK segment.
As a result, gift vouchers are expanding into more markets, particularly within the service industry. 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 by 7.6% for the third period running, while retail has contracted in growth by -3.7%.
Businesses in the hospitality, travel and entertainment industries are experiencing a significant growth stream. - Especially since Covid.
If you want to make more revenue by selling gift vouchers and gift experience vouchers, don’t wait! Vouchers are not just limited to retail stores or hotels anymore. If you offer any kind of service or experience, this is your next step.
Jump on this fast-growing trend and boost your revenue.
We hope you are clear about the expiration date of the gift voucher law here in the UK.
If you’re a business wanting to introduce gift vouchers for your services or experiences, it's best to implement it 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 also provide an easy-to-use interactive system where you can create, redeem, manage, and track vouchers, gift cards, and more.
Contact us at Enjovia where we can help facilitate and support all your gift voucher system requirements.
Knowing the rules around gift cards and vouchers is important to protect your consumer rights when giving them as gifts. UK laws ensure fair treatment and transparency for gift card refunds and vouchers.
Knowing gift card laws helps you sell and buy them wisely.
Always check the expiry dates, understand the terms and conditions, and contact the retailer if you encounter any issues.
Gift cards and vouchers should bring joy and convenience. Understanding gift card refund laws can lead to a positive gifting experience.
For more information on gift card refund laws and best practices, visit enjovia.com.the end.
