Gift card refund law

3 min read

Navigating the Gift Card Refund Law: What You Need to Know

‍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.

It's crucial to know the gifting regulations to protect your rights.

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 this post:

gift card expiration law

gift card expiration law

What are the different types of gift cards?

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

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 card

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

Consumers can receive a refund in cash or a new gift voucher for any remaining balance on a gift voucher. Traders are not allowed to charge a fee for changing the names on the voucher. Interestingly, these regulations do not cover electronic money gift cards, governed by the European Communities (Electronic Money) Regulations 2011. However, this legislation has no specific laws regarding expiration dates for electronic gift cards. These rules protect consumer rights regarding gift vouchers in the UK.

Gift Certificates

In the US, gift certificates are used the same way gift vouchers are used in the UK.

For this blog post, we will use either gift cards or vouchers to refer to the same meaning as disclosed above.

Voucher vs coupon

Gift coupon

A gift coupon can be purchased or entered by customers or administrators. It 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.

Gift voucher law

Companies can find the rules around gift vouchers confusing and discouraging due to conflicting information.

Gift card refund law

Existing expiry date on gift vouchers law

Companies wanting to offer their products and services through gift vouchers have an easier time in the UK.

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.

The Consumer Protection Gift Vouchers Act 2019

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:

  • A minimum 5-year expiry date for all gift vouchers or have no expiry date.
  • The expiry date must be clearly communicated to the consumer
  • Traders cannot require vouchers to be spent all at once if the remaining balance is more than €1.
  • The remaining balance of the gift voucher shall be reimbursed either in cash or another gift voucher
  • Prohibits traders from charging a fee for amending the names of the consumers named on the voucher

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.

Consumer Rights Gift Vouchers UK

Consumers in the UK are protected by the Consumer Rights Act 2015 when it comes to gift vouchers. This legislation ensures that consumers have certain rights and entitlements when purchasing and using gift vouchers.

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.

Consumers may still redeem gift vouchers even if the retailer goes bankrupt or stops trading. However, it is essential to note that this will depend on the specific circumstances and the retailer's policies.

Expired vouchers consumer rights

Don't despair just 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. It is worth 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.

My gift card expired, what can I do?

If your gift card has expired, there are a few steps you can take to recover the value potentially:

  • Contact the retailer:

Reach out to the retailer and explain the situation. Some retailers may agree to extend the expiry date or provide a replacement gift card as a goodwill gesture.

  • Check the terms and conditions:

Review the terms and conditions of the gift card to ensure that it was sold with a specific expiry date. You may be entitled to a refund or replacement if the expiry date is unclear.

  • Know your rights:

Be familiar with the Consumer Rights Act 2015 and the Consumer Protection (Gift Vouchers) Act 2019. These acts give you certain rights and entitlements regarding gift cards and vouchers.

Expiry Date on Gift Vouchers Law

Gift vouchers in the UK must be valid for at least five years from the date of purchase as per the Consumer Rights Act 2015. This means the recipient has ample time to use the voucher before it expires.

In the UK, gift vouchers must remain valid for at least five years after the purchase date, according to the Consumer Rights Act 2015. The voucher expiry date must be clearly indicated by retailers on the voucher or in the terms and conditions.

Additionally, the act prohibits unfair terms and conditions that may restrict the use of gift vouchers. Retailers should disclose the voucher's terms and conditions accurately and transparently during purchase.

What do the numbers on a gift card mean?

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:

  • Card Number:

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.

  • PIN:

The Personal Identification Number (PIN) is a security feature that protects the funds on the gift card. It is typically required when making purchases or checking the card balance.

  • Activation Code:

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.

  • Balance Check Number:

This number allows the cardholder to check the remaining balance on the gift card. It is often found on the back of the card or in the accompanying documentation.

Is it legal to put an expiry date on a gift voucher?

Yes, putting an expiry date on a gift voucher in the UK is legal. The expiry date must be at least five years from the date of purchase. This ensures that consumers have a reasonable amount of time to use the voucher before it expires.

Should gift cards have an expiration date?

Gift cards can expire, but retailers must follow the Consumer Rights Act 2015 rules. This act mandates that gift cards must be valid for at least five years from the date of purchase.

Resources for learning more about gift card refund laws - enjovia

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 for gift card refund laws. See here for the US gift card law.

How to be an ethical company regarding gift voucher expiry dates?

1. Make your expiry dates clear on the voucher itself

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 having this information clearly on the voucher itself, whether paper, card or electronic, you’ll be covering your back in case of future guest complaints or complications around expired vouchers.

Plus, you'll give consumers the confidence to spend the voucher well within the expiration date.

2. Make the expiry date laws clear

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.

3. Offer extension vouchers for expired vouchers

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 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 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.

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

  1. relieve her guilt for forgetting to book her treatment within the year.
  2. 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!

4. How long to set expiration dates?

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.

5. Reimbursing an expired 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.

Benefits for companies selling gift cards:

gift giving

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, 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.

The rise of Experience gift vouchers

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.

Make more money with gift vouchers

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.

Getting started

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.

How can we help?

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.

Conclusion: Ensuring your rights under the gift card refund law

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 end.

Recent posts

April 28, 2024

How to Increase Revenue in a Hotel: Proven Methods for Success

How to increase revenue in a hotel? Running a hotel is demanding, and challenging day-to-day operations can divert your attention from the bigger picture. In this post, we have listed proactive strategies to implement in your hotel that will significantly increase your revenue. So, without further ado, let’s dive straight into it. Focus on Customer […]
Read more
April 3, 2024

Gift card expiration law

If you're a small or independent business in the US, you'll find this post helpful. In this blog post, we discuss the gift card expiration law. (For UK gift card law, see here).  Find out how to sell gift cards while complying with federal and state gift card laws.  We will also discuss how the federal […]
Read more

Talk to Us About Our Gift Card & Voucher Management System Today

Call us now
Privacy policy