To ask Her Majesty’s Government what assessment they have made of the case for (1) prohibiting expiry dates on gift vouchers, (2) requiring retailers to notify purchasers of any expiry dates, and (3) requiring retailers to publish the proportion of vouchers sold that are not redeemed.
My Lords, the Government strongly encourage businesses to be transparent with consumers over voucher expiry dates. This is backed by legislation which enables consumers to challenge unfair terms. Many retailers offer vouchers which do not expire and, where expiry dates are used, we strongly encourage businesses to stipulate at least two years. There are no plans for further legislation.
My Lords, I thank the Minister for that helpful Answer. How many noble Lords are aware of people with date-expired gift cards at home, people whom the Competition and Markets Authority defines as vulnerable consumers, perhaps elderly or with learning difficulties? Will the Government consider emulating Ireland’s Consumer Protection (Gift Vouchers) Act 2019? That mandates a minimum five-year expiry date for all gift vouchers, and for the expiry date to be clearly communicated to the consumer on the voucher, not just in small print on the receipt, which is usually held by the purchaser.
The noble Baroness was kind enough to meet me yesterday. I now appreciate more fully the issues she raises regarding vulnerability, the elderly and those with learning disabilities. We have in the past worked with the UK Gift Card & Voucher Association. After this discussion, if the noble Baroness is willing, I will put the Hansard record of this Question to it, to encourage it again to strengthen the information which it puts on the cards and consider how to address this quite complicated but none the less important issue.
Is my noble friend aware that for those of us who are grandparents, gift vouchers are a very useful gift which the receiver can choose what they do with? Would it not be impossible for the retailer to indicate to the consumer when they buy the gift voucher exactly when it expires? I declare an interest, having a daughter who runs a very successful cookware shop. I cannot see how, when she is serving customers, she would have the time to emphasise on each occasion a gift voucher is purchased that it has an expiry date.
I must admit that since my grandparents passed away, I have not received a postal order. I am aware that the challenge is that the gift voucher is often given but the details are held by the purchaser. There is a dislocation between what is on the voucher and what is on its receipt. That is why, in working with the UK Gift Card & Voucher Association, I would like there to be a stronger connection between the voucher itself and the information about it, which should be readily determined. I strongly encourage the association to ensure this.
My Lords, given that it is possible to make changes so that there can be clearer identification regarding the voucher, the purchaser and the person who receives it, is it not possible to develop a system in which we can try to persuade better corporate responsibility, so that if in fact a voucher is not redeemed its cash equivalent is paid to a charity?
My Lords, although unexpired and unused, my One4all gift card that was originally worth £40 is now worth only £25.60. I discovered in the small print that each month after 18 months an inactive balance charge of 90p is deducted from the card. Other owners of the cards have described this as a scam and, not surprisingly, 68% of users have given them the lowest possible rating on Trustpilot. I am not asking for the Minister’s sympathy, but can he at least tell us who makes the rules that enable that to happen and say whether they should be changed?
I do indeed offer sympathy to the noble Lord for his heartfelt pain in this regard. He is correct: certain voucher providers will, through inactivity, seek to deduct money from the value. There is a recognition that a card can be part of the bottom line of a company only once it has been redeemed or the expiry date has passed, so there is a logic there. However, the very act of penalising somebody for not using their card sounds both pernicious and unpleasant.
My Lords, why should there be any limit whatever on a voucher? After someone has passed their money over to a shopkeeper and the shopkeeper has given them a receipt for goods to buy at a later date, why should they not be able to use it whenever they want?
The logic seems to be there but the reality is that the provider of the voucher cannot add the value to their bottom line—they cannot redeem its value—until either after the expiry date or the voucher is used. Large companies can often extend the expiry period for five to 10 years, but smaller companies would struggle to do so as they would simply lose the money and not be able to recoup it in due course.
As a former retailer, I remember debates about the accounting treatment of these vouchers. However, I want to make a different point concerning competitiveness. Often vouchers are for British stores, but a modern move is to give people vouchers for major US internet retailers. I worry that, if we were to bring in new regulation, that trend might be encouraged and some of our smaller retailers that we try to shop at would be affected.
My noble friend is correct. It is a challenge when we live in an internet age that connects the global marketplace in a competitive sense with smaller businesses on the high street, so we need to be cautious. However, I hope that any rules in this regard would be of the highest possible standard to ensure that people who received gift vouchers did not find themselves penalised by holding them.
My Lords, I looked in my wallet before coming to this debate and noticed that I had two gift vouchers from Christmas. I am not quite sure what they say about me: one is for Greggs, the bakers, and one is for Waterstones. Nitecrest has estimated that 98.6% of gift vouchers are spent within the first year, but since the market for gift vouchers is worth around £6 billion, that means that about £84 million is not spent within the first year. Do the Government know what proportion of people who fail to spend their gift vouchers come from low-income households? If they have the answer to that, what measures, if any, are they looking to take to help support consumers and customers?
The noble Lord clearly has kind friends who give him Greggs vouchers and Waterstones vouchers: food for the heart and for the mind. At present, some £300 million in gift vouchers per year is unclaimed out of a £6 billion retail offering. Quite often they are lost—they have not been redeemed because they have simply been misplaced. I do not have the figures, and I do not believe the figures have been gathered, on those who come from low-income families, but I recognise that this is still 5% of the overall market, which is way too high. We need to find a way to ensure that the value of these products is not lost, particularly when low-income households are affected.
My Lords, I refer to my interests in the register. Has the Minister considered the position when vouchers are purchased in good faith from organisations that promise experiences of various sorts, but when the recipients of those vouchers try to redeem them they find there are specific circumstances in which the experience has to take place, be it skydiving—not something that I personally wish to indulge in, in consideration of the security of everyone below—or whatever bizarre thing people might wish to do? Has the Minister considered whether there should be some expectation on those selling these vouchers that they are genuinely redeemable?
Part of the problem with the experience voucher is that it is often specific and limited within a given season or period. I suspect that skydiving is more limited to the summer months so, should noble Lords wish to experience that, their time is yet to come. I recognise that the experiences need to be much more transparent to ensure that those vouchers can be redeemed within the allotted time and those experiences are fully enjoyed—even for those underneath the skydivers.