The search for Christmas stocking stuffers is well and truly afoot.

For those who leave Christmas shopping until the last minute or have the chore of buying for a fussy loved one, gift cards are usually an ideal solution.

Consumer group Choice says our obsession with gift card-giving sees Australians spend roughly $2.5 billion on them every year.

But recent moves in the UK have raised concerns that recipients may lose some of the benefits if retailers enter administration in the new year.

After calling in the administrators, the parent company of Topshop, Arcadia, said customers with gift cards would only be allowed to use them to cover half the price of their purchase.

The remainder would have to come from their wallet.

Tweet from @Chrisitv

Choice head of policy and government relations Julia Stewart told The New Daily retailers have an obligation to treat gift cards as they would cash and cannot tell a consumer how they are used.

But she said that changes once a company enters financial trouble.

“Within any voluntary administration, consumers typically are at the bottom. They obviously come behind creditors and those people who have invested their money in that particular company,” Ms Stewart said.

According to the ACCC, gift card holders may become ‘unsecured creditors’ during administrations if they have not redeemed their card’s value.

And if a business changes hands, gift cards are honoured if it was sold as a ‘going concern’ – where the businesses’ assets and liabilities are sold by the old owner to the new owner – and the new owner buys shares in the company.

Considering a number of big-name retailers entered administration this year – including Seafolly, Tigerlily, Collette and Napoleon Perdis – Ms Stewart said it was crucial customers research the retailer’s recent history to minimise their chances of purchasing potentially dead money.

Tweet from @GemmaActon

Retail Doctor CEO Brian Walker said although fashion’s future remained uncertain, home improvement and furnishing retailers – including Bunnings – were unlikely to fold in the short term.

But he warned consumers to be mindful of the terms and conditions on a retailer’s gift card, as some may contain exclusions against marketing promotions or customer loyalty programs.

“Understand [that] whilst it represents a currency there may be terms to that transaction that are restrictive, and make sure to deal with reputable and well-regarded businesses,” Mr Walker told The New Daily.

“And if you are worried a retailer may go under, purchasing a card from a shopping centre chain or one that covers a number of participating retailers could be a good way to hedge their bets.”

Following amendments to Australian consumer law last year, all gift cards now carry a minimum of a three-year expiry (with the date clearly stated) and most have waived post-purchase fees that would otherwise reduce their value.

Meanwhile, for those with a habit of stashing a gift card in the bottom of their drawer, many retailers have now partnered with electronic gift card providers to ensure cards can remain stowed on their phone.

Ms Stewart said the best way to ensure those cards are used on time is ensuring consumers purchase a card they believe will have a high likelihood of being used within six months.

“We just really encourage people to do their research, so have a look at the company to make an informed choice, and even consider smaller companies and initiatives like Buy From The Bush,” Ms Stewart said.

Tips to avoid gift card pain

• Check the terms and conditions for exclusions
• Research a retailer’s history to minimise risk of buying dead money
• Hedge your bets by buying a gift card that can be used across multiple retailers
• Buy an e-gift card to avoid the risk of losing one.