Research from Fairer Finance into 70 gift cards from major retailers has found that 61 (87%) still carry expiry dates.

Of these cards, 53 (75%) carry an expiry date of two years or less – after which time all money put on the card becomes worthless. On top of this, 49 out of the 65 that have expiry dates (75%) only state the expiry date in the terms and conditions or FAQs.

The findings come as Fairer Finance launches its Gift That Keeps On Giving campaign to introduce three key changes to practice in the gift card market, to improve protection for consumers.

As well as the risk of money ‘evaporating’ when cards expire, there is no formal protection for gift card holders when companies go bust.

The number of major retailers hitting financial difficulty has been increasing in recent months, with Toys R Us, Maplin, House of Fraser and Poundworld all going into administration over the past year.

The gift card market has doubled in size in the last five years, and is currently worth more than £6n annually. Consumers lose out on over £300m a year from buying gift cards – through losing them, not using them before expiry, not being able to use them during a company’s administration period, or not being able to receive refunds if a company enters liquidation.

Consumer group Fairer Finance has identified three keys failings in the gift card market:

1. Gift cards are allowed to be sold with expiry dates chosen by the company. Companies already benefit from gift cards, as the money loaded onto them depreciates in value, the longer it is held and remains unspent. The effects of inflation mean that if someone was to try and use their gift card after five or 10 years, they would be able to buy fewer goods with the money on the card.

Fairer Finance believes there is no reason why the scales need to be tipped further in the company’s favour by forcing gift cards to become worthless after an arbitrary period of time.

The UK is behind the curve on this issue, as the sale of gift cards with expiry dates is already banned in Canada, as well as several US states, such as California, Florida, and Connecticut.

Expiry dates in the UK can be as short as 12 months.

2. There is no requirement on companies to honour gift cards during administration. If a retailer puts themselves into administration, they are allowed to cancel all existing gift cards. This means consumers who have been given gift cards find their presents are worthless.

An average of 38 companies have failed in the UK each year for the past ten years, affecting 2,716 stores. In 2018 alone, household names such as Toys ‘R’ Us, House of Fraser, Poundworld, and Maplin have all entered administration. These events are outside the customer’s control, and so the customer should not bear the penalty of them. Despite this, consumers lose on average £83 each due to gift cards not being honoured during administration.

3. The funds held in gift cards aren’t protected if a company enters liquidation. If a company is liquidated, gift card holders are likely to receive almost no money back. On average, they receive less than 1p per £1 on their gift card in this situation. Again, through no fault of their own, consumers are being told the funds that were invested in the card are now worthless due to events outside of their control.

Fairer Finance calls on the government to implement its three proposed solutions:

1. Ban the sale of gift cards with expiry dates.

2. Ensure gift cards are honoured when a company is in a period of administration.

3. Ring-fence funds from all gift cards bought in the last five years, to ensure refunds are available for one year in the event of liquidation.

James Daley, Managing Director of consumer group Fairer Finance, said: “Hundreds of thousands of people will be receiving gift cards this Christmas – many of which will never get used because they expire, or the retailer goes out of business. The fact that there is still no proper protection for consumers stands in stark contrast to the spirit in which gift cards are given.

“There’s no good reason why shops should be allowed to add expiry dates to gift cards. The value of the card is eroded by inflation every day that a card goes unspent. And the likelihood of cards being used after a year is fairly low – as a significant number of cards are lost or forgotten.

“But for those customers who find an unused card a few years after it was given to them, there’s no good reason why they shouldn’t be able to use it.

“Gift cardholders also deserve much better protection when companies run into trouble. We’re seeing a growing number of insolvencies on our high streets, and it’s only right that people’s Christmas presents can’t suddenly evaporate and become worthless when this happens. We’d like to see the government legislate in this area. But as a first step, we’d like to see retailers voluntarily working with the British Retail Consortium to find a solution.”

Notes to Editors

To speak to James Daley, email

You can see Fairer Finance’s full report here to read exactly what harm is being done by current practice, and exactly why these proposed solutions would protect against this.

You can also visit Fairer Finance’s campaign page here to see exactly which companies have expiry dates, how long these expiry dates are, and where this information is being disclosed to consumers.