Don’t know what to buy a loved one for Christmas? Gift cards and vouchers are often the solution – a market worth £7billion a year. But such a thoughtful gesture can end up being more of a curse than a gift.
Just ask Doug and Angela James. The couple, from East Sussex, had a ‘distressing and infuriating’ experience trying to spend money on their Vanilla gift cards.
These are prepaid gift cards which can be used anywhere that Mastercard is accepted. They can be bought in denominations up to £100 for a maximum fee of £4.95. They can also be used internationally, but with a 3 per cent fee for foreign currency purchases.
Last year, £4.65billion was spent on gift cards – most of the time the cards work well, but when something goes wrong, money can be lost in an instant
Last year, Doug, 86, and Angela, 82, received eight such cards from their grown-up children as a present for their diamond wedding anniversary. Each card was loaded with £100.
The original intention was to use the cards to pay for a riverboat cruise on the Danube in spring this year, but the coronavirus pandemic scuppered this. Instead, they decided to use them to fund a staycation in Norfolk in September. At the end of their stay, Doug went to pay with the cards. But the first two card payments were declined, coming back as ‘not authorised’.
Doug called Vanilla’s customer service department from the hotel but after a short time the call was disconnected. He tried phoning back but got no answer. Doug ended up paying with his bank card.
Back home, he spoke with several customer service staff members, providing photographs of the signed backs of the cards, copies of the card purchase receipts and the ‘not authorised’ payment slips. As his complaint dragged on, Doug was told he had too much money overall on the gift cards – and that access to the funds was denied. To solve this, he would have to provide proof of identity and residence – and an explanation for why he had so many cards.
Doug says: ‘The clue to the problem with Vanilla gift cards is in the name. It’s unlikely the purchaser of the card will be the user, who, in turn, will have no knowledge of the terms and conditions until later.’
Thankfully, after The Mail on Sunday intervened, the company refunded Doug the card balances of £800 the purchase fees (£39.60) and paid a £100 goodwill payment.
A spokesman for InComm Payments, which manages Vanilla gift cards, says: ‘The high number of gift cards registered to this individual’s account triggered an alert that temporarily locked their funds. Our customer care department has reached out to Mr James to resolve the situation.’
Last year, £4.65billion was spent on gift cards. Most of the time the cards work well, but when something goes wrong, money can be lost in an instant.
This happens when shops go bust, leaving holders of gift cards with these retailers out of pocket – and many retail businesses are in a precarious position this year.
Martyn James, of consumer complaints service Resolver, says: ‘Think carefully about your choice of retailer before you purchase a gift card. Even big brands have gone into administration and it can happen with little warning.’
Meanwhile, recipients often forget to spend their money gift before the card’s expiry date. So-called ‘inactivity fees’ can also eat away at outstanding balances, while not all gift cards can be used to pay for online purchases despite swathes of shops currently being closed.
But if buyers think carefully before they give, and recipients act swiftly when they receive, consumers can sidestep most pitfalls.
Good options include a multi-store gift card from One4All which can be spent at many different shops, bars and restaurants – or a dedicated town and city gift card which supports local high streets.
A spokesman from the Gift Card and Voucher Association says: ‘Gift cards are not a product for the bottom drawer – they are there to be spent and the quicker the better.’
