People should check the expiry date of their gift cards, Consumer NZ says.
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More than $10 million is wasted on unredeemed gift cards every year, Consumer New Zealand estimates.
Research by the watchdog found 24 percent of gift card holders cannot fully redeem them, either because the card expires or the retailer goes bust.
It was warning people who received a gift card this holidays should check the expiry date, which can be a year or less.
The watchdog estimated that New Zealanders were collectively losing in excess of $10m per year on unspent gift cards.
“We have been looking into the expiry dates of many different retailers to gauge how long people have to redeem their gift cards,” Consumer head of communications and campaigns Gemma Rasmussen said.
The watchdog reviewed 61 gift cards and found only 14 did not have an expiry date.
“We applaud these 14 companies and would like to see others follow suit. A few retailers have five-year expiry dates, which is better than the norm of one to two years.”
The shortest expiry period of the companies reviewed was 12 months.
Consumer’s investigation also found 14 of the 61 cards only last for a year, but it had received complaints about other organisations with shorter expiry dates, such as beauty salons, which often only give six months.
Once that time has lapsed, any unspent credit usually stays in the retailer’s coffers.
“If you received a gift card from a retailer that only gives customers 12 months to redeem it, you should spend it soon,” Rasmussen said.
“Although some companies will offer a grace period after a gift card has expired, they’re not obliged to. So, use it or lose it, basically.”
Consumer said it understood some retailers calculate gift card income on the assumption a percentage of shoppers will never spend all the money on their gift card.
“Of the few retailers who publish non-redemption information, they calculate non-redemption rates between 5 and 10 percent. Across a multimillion-dollar industry, this adds up to a nice little earner for retailers.”
For many years Consumer has been campaigning to end unfair gift card expiry dates.
When a gift card expires, the retailer pockets any money left on the card.
New Zealanders were getting short-changed compared with those in other countries.
In Australia, consumers have a minimum of three years to use their gift cards. And in Canada, the US and Ireland, there were either no expiry dates or at least five years to spend gift cards.
“It’s particularly shocking that retailers operating on both sides of the Tasman give Australian card-holders preferential treatment,” Rasmussen said.
“Many retailers won’t match the three-year timeframe here in Aotearoa.”
Recently, National MP Melissa Lee’s Fair Trading (Gift Card Expiry) Amendment Bill was drawn from the ballot.
If passed, it would see the minimum expiry date of gift cards extended to three years.
“We are hopeful this bill will be passed this year,” Rasmussen said, “but we’ll be pushing for a minimum of five years to ensure consumers don’t miss out on what’s rightfully theirs.
“In the meantime, check your gift card expiry dates and use them, before it’s too late.”
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