Christmas or, perhaps, your end-year bonus or the tax-efficient small benefit scheme brought you gift cards and, with them, the promise of guilt-free spending.
Then you opened your Irish Times this week to a torrent of scare stories about people trying and failing to use such cards
So what’s the story? What are your rights when using these cards and what do you need to watch out for? The stories this week would certainly give customers pause for thought.
The customer service from One4All encountered by our reader when her card simply would not work as it should will be all too familiar to consumers across a wide range of businesses in Ireland.
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It was, perhaps, more astonishing because the nature of One4All’s business is that it is customer facing. Even worse, as most of those customers will have received their cards as presents, there is an inherent feelgood factor which, if this case is anything to go by, they have clearly gone out of their way to puncture comprehensively.
Protection
The first thing to note is that not all cards are created equal, not helped by the fact that some names can be used interchangeably such as gift voucher, gift card or even electronic money card.
The most recent legislation covering the sector is the Consumer Protection (Gift Vouchers) Act 2019, which came into force in December of that year.
It strengthened consumer rights in several areas. First, it imposed a minimum valid term for gift vouchers of five years.
Until then it had been random. Many were valid only for a year, others were open-ended. Some retailers applied those terms rigidly, others were very forgiving, regardless of how old the voucher was.
Retailers were also forbidden from insisting that a voucher must all be spent in one go. Before the legislation, it was not unusual to hear of retailers who insisted on one and done – with any outstanding balance on a card or voucher after a purchase simply disappearing back into the retailer’s balance sheet.
Any outstanding balance above €1 must now be returned to the customer either on the same or a replacement voucher valid for the same period, in cash or credited to a debit or credit card. The choice is the retailer’s.
And stores can no longer insist that only one gift voucher could be used per transaction as some used to do. If you have more than one voucher for a store and the bill exceeds the amount of any of them, the store must take two or more of the vouchers if that is what the customer wants them to do.
But those rights pertain only to vouchers issued by a single store or chain of stores – such as, say, Lifestyle Sports, Dunnes Stores, a department store or your local garden centre – or shopping centre cards that are valid at stores within that shopping centre.
If you have a gift card that can be used in more than one shopping centre or in businesses outside the shopping centre, the protection under the legislation falls away. Online deal vouchers offering discounted rates on goods or services also fall outside its remit.
The same is true for electronic money cards. This includes the likes of Mastercard’s AllGo cards, Cheetah Money and, perhaps unexpectedly, gift cards sold by One4All, possibly the biggest player in the market.
It is not that these are unregulated, however. Electronic money cards are covered by EU (Electronic Money) Regulations and, among other things, there is no time limit on their use.
Charges
That is not to say that this is free money, however. Gift card providers can and do impose charges for a range of items.
The most common charge is for cards that have not been used for a certain period. Variously called a maintenance fee or an inactive balance charge, these can range from €1.45 a month at One4All to €3 a month on the Dundrum Shopping Centre card and Mastercard’s AllGo prepaid card. Most often, these kick in after a year, although it is 18 months with One4All.
Given that many gift cards are for amounts of between €20 and €50, these charges can all too easily eat into the value of your gift. Some people will assume they have five years to spend their gift, and they do ... as long as there is any value lift in the gift card or voucher after monthly maintenance charges are deducted.
You might think the charges are not significant, but I can assure you the gift card companies do not share that view.
Figures for TSC Ventures, the parent of GVS Gift Voucher Shop – the company behind the One4All cards – noted that more than half of its €79.6 million in annual revenue in 2024 came from inactive balance charges and other administration fees. That’s a lot of gift cards sitting unused in drawers and wallets across the country.
Figures from the Competition and Consumer Protection Commission (CCPC) last month noted that more than six in 10 people received at least one gift voucher at Christmas the previous year. But close to one in four had yet to use them 11 months later.
“Our research shows how popular vouchers are as gifts, but if they’re not used, they’re a waste of money,” CCPC director of communications Grainne Griffin said. “We are encouraging consumers to use gift vouchers as soon as possible, and if you’re thinking of giving someone a voucher this year, maybe consider if they would prefer cash – it comes with fewer terms and conditions.”
Other charges include things such as redemption fees if you want to cash in the value of a card with the funds going to your bank account – for which One4All will charge €8.
Prepaid cards can also levy a range of charges, including to activate the cards and top them up, and impose annual or monthly fees.
If you’ve been paid a bonus at the end of last year or been fortunate enough to work for an employer happy to avail of the tax-free small benefit exemption of up to €1,500 a year, there’s no sense in handing some of that money back to a payments firm. It pays to read the small print before buying to see what, if any, charges you will be confronted with.
Losing your card can also be expensive. Some providers charge replacement fees – One4All, for instance, says it can charge up to €5. But it can get worse. Not everyone will replace a lost or misplaced card. As the CCPC notes: “Losing a gift voucher is no different to losing cash. Businesses do not have to replace it for you.”
You might also lose out if the company that issued the card goes out of business. Card holders will find themselves far down the list of people queuing up for repayment in that case.
Holders of cards at four Irish shopping centres – Liffey Valley, The Square Tallaght, Mahon Point in Cork and Whitewater in Newbridge, Co Kildare – had a scare a few years ago when cardholders found their access to the card balances temporarily frozen. Fortunately access was restored after a few weeks.
At least with electronic money cards, the amount outstanding is supposed to be ring-fenced, meaning cardholders will get repaid, but it can be some way down the line.
And then, of course, you need to be careful when buying the cards. This week JD Sports admitted that until the middle of last year gift cards ordered online were not compliant with legislation that came into force more than five years ago.
The group pointedly had no information to give when my colleague Conor Pope asked for an estimate of the amount people who might have been left out of pocket since late 2019 by being told, wrongly, that their cards had expired after one year.
The best advice for anyone who has a drawer full of assorted gift cards and vouchers is to know your rights, don’t lose them and, ideally, use them sooner rather than later so that you don’t pay unnecessary charges.
You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here
