Gift cards have burgeoned into a multi-billion-dollar industry in Australia, but companies are pushing short expiry dates and sneaky fees onto consumers.
A go-to present for fussy friends and family, about 34 million gift cards are sold in Australia each year with an estimated annual worth of up to $2.5 billion, according to Treasury.
However, Australians are throwing away an estimated $70 million in unused gift cards each year, sometimes due to the limitations some brands enforce.
Companies are catching consumers out by offering short expiry dates, fees to check the balance, and even limiting which products can be bought with the voucher, research by comparison site RateCity shows.
The site revealed which companies top the good list, and the ones that drop down into the bad list when it comes to the restrictions they place on their cards.
Popular retailers including Bunnings, JB HiFi, and The Good Guys topped the list of best gift cards, thanks to generous terms including no expiry date, no or low fees, and the option to use the card online and in store.
Sportsgirl was No.1 on the list of companies that sold gift cards with major catches – the fashion retailer offers a gift card that expires in just a year (except in NSW and SA), comes with a $5 postage fee, and can’t be used online.
Shopping centre company Westfield’s gift card also made the naughty list because of its high fees and the caveat that some Westfield stores may not accept the card.
Would-be holidaymakers with a Jetstar gift card may be disappointed to learn the card can only be used in one transaction and can’t be redeemed for the budget airline’s “holiday products”, which include accommodation, activities, transfers, parking, insurance and car hire, if not included with a flight booking.
While laws on gift card terms currently vary around the country, tougher federal laws requiring all gift cards sold in Australia have expiry dates of at least three years will come into effect from November 1, 2019.
Under the new laws, the expiry date must be “prominently” displayed on the gift card, post-supply fees will be banned, and fines of up to $30,000 will apply for businesses that offer expiration dates of less than three years.
Until then, shoppers should “look for a gift card that offers a long expiry date, and make sure there are no hidden fees”, RateCity director of research Sally Tindall said.
“And if you have a gift card that’s already expired, contact the store and ask for them to honour it. Now the laws have been changed, there’s every chance they’ll say yes,” she said.
How to pick a good gift card
- Expiry date: Choose a card that doesn’t expire or has at least three years.
- Fees: Look for gift cards that don’t charge purchase or activation fees.
- Postage: Pick a gift card that offers free postage.
- Restrictions: Most gift cards can only be used in one store, however if choice is what you’re after, look for a gift card that can be redeemed at a variety of retailers.
How to get the most out of your gift card
- Store it in a safe place – If you lose your card, retailers are under no obligation to replace it, despite the fact the NSW government has said it is best practice.
- If your balance falls under $10, ask for change. Most companies ban this in the fine print, but you might find they bend the rules when you ask face to face.
- Make a note of the expiry. If you have an expired gift card, don’t throw it out. Call the store and ask them to honour it.