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Multi-store gift cards that are safe from retailers going bust

Neil Faulkner
by Lovemoney Staff Neil Faulkner on 19 November 2013  |  Comments 9 comments

A succession of big businesses have hit the skids in recent years, leaving many holders of gift cards and vouchers out of pocket. But multi-retailer gift cards don't leave your money in such a vulnerable position.

Multi-store gift cards that are safe from retailers going bust

Woolworths, Jessops, Comet, JJB Sports – just some of the retailers to go bust in recent years. Many of these stopped taking gift cards either for good or while they struggled with the early stages of going into administration.

The warning from what happened at Comet is that stores could still suddenly close, leaving cardholders with nowhere to spend the gift cards.

Multi-retailer gift cards

The One4All gift card is one possible solution, although it comes with catches.

It's accepted at dozens of retailers in the UK. Don't confuse retailers with outlets: the website mentions “17,000 outlets”, but this number means every WH Smith shop, every River Island or B&Q store, and every branch of all the other retailers included on the scheme.

Scanning the list of retailers included in this card, I see a good number of shops that I wouldn't necessarily associate with the lowest prices, but if you look for yourself you might find enough retailers that are of interest to you.

The price of a multi-retailer gift card

Although the One4All gift card is available on the internet, it only makes sense to buy it from a Post Office branch. Otherwise, you're going to give away more money in the form of a 99p delivery fee.

One cost buried in the small print is a £7.50 charge for closing the card and asking for your money back (for which you must call an 0870 number to do so, which could potentially be expensive).

Another charge is 90p per month from the 19th month until (or unless) you have spent all the money on the gift card completely. The final charge mentioned in the contract is £5 to replace a lost or stolen card.

You'll need to keep up-to-date on your card balance so you know how much you have left to spend in stores. You can do this for free on the One4All website.

I have looked at two other multi-retailer gift schemes, but both come with compulsory costs on top of the gift money itself. Therefore in my view you should probably avoid Love2shop and Bonusbonds. Please comment below if you know of any more multi-retailer options.

It just takes one company to go bust...

The One4All card still doesn't get safely around all the problems of a single company going bust.

The issuer of the card is Bank of Ireland, the Irish high-street bank. If Bank of Ireland goes bust and refuses to pay for gift card purchases, you won't be compensated by the Financial Services Compensation Scheme or any other government compensation scheme.

Currently, the policy of the Irish government, like most governments, is to save high-street banks at all costs, but governments and taxpayers can't afford that policy in all circumstances, so you could find yourself in the same position as if you had bought a gift card from an individual retailer that becomes insolvent.

One positive thing about this card being issued by a bank is that you can complain to the free Financial Ombudsman Service for compensation if you feel you've been treated unfairly. Read How to complain to the Financial Ombudsman Service for more on this.

Individual gift cards are still better

I still think buying a gift card from a specific individual retailer makes more sense a lot of the time, provided you know the recipient regularly chooses to shop there and you're confident the retailer is financially healthy.

That latter point is normally easy to judge: start running your eye down the headlines in the business section of your favourite newspaper or news website once a week. If you had done this over the past few years, you would have been aware that most or all of these failed retailers were in trouble, or likely to be in trouble, largely due to competition from the internet.

Even better alternatives

Whenever I research this, I find that retailers that join or create any kind of gift or reward schemes are usually (but not always) more expensive than other shops or online shops. That might be why so many of the individual retailers offering gift cards have gone bust recently – they can't compete with the internet. That's a warning in itself about buying gift cards.

I, and others I know, have made and decorated our own gift cards. In addition to naming the store or item that the card is intended for, you can write in your “small print” that it is redeemable on anything else of the recipient's choice. Making your own gift card doesn't just make the card safe from retailer bankruptcy; it shows you have put in a bit of effort and the recipient can choose a better, cheaper or more favoured retailer than currently offered by gift cards.

You could avoid the need to choose gift cards altogether by keeping a record of what your friends and family say they like, writing it down as soon as they mention it. This ensures you have plenty of ideas for buying proper gifts by the time Christmas comes around.

Also, I don't see what's wrong with just asking someone what gift they want if you're unable to come up with a good idea yourself.

More on Christmas:

How to have a cheaper Christmas

Twelve good, cheap Christmas gift ideas

How to make successful homemade Christmas presents

Top toys for Christmas 2013: where to find them cheapest

Top credit cards for Christmas shopping

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Comments (9)

  • Latent
    Love rating 21
    Latent said

    Gift cards.... moronic gifts from moronic givers!

    Report on 23 January 2013  |  Love thisLove  0 loves
  • CuNNaXXa
    Love rating 410
    CuNNaXXa said

    Firstly, with all the recent closures, why would any sane person trust their cash in the form of a gift card?

    Secondly, retailers offering gift cards should have taken out an insurance to cover losses should they stop trading. After all, we HAVE to insure our vehicles for third party liability, and businesses need to insure for third party liability, so why didn't they insure gift cards?

    Obviously, they want to maximise their profits, so they thought the best way was to issue gift cards with the onus being on the recipient, rather than the issuer.

    How thoughtless of them. They take our money, and in return offer us a card that has no protection whatsoever. Even credit and debit cards have some protection.

    So, who in their right mind is going to trade cash, which is honoured by the Bank of England, for a gift card, which is only worth what a retailer will give you for it, and has no indemnity whatsoever.

    Report on 23 January 2013  |  Love thisLove  0 loves
  • easygoing
    Love rating 170
    easygoing said

    LatenT. Unfortunately the Report facility is not working. I would dearly love to reply to your comment in kind but I shall refrain. For those who cannot get out to shop or are buying for someone whose needs are obscure a gift card is ideal.

    I have a teenage granddaughter who would be mortified if I tried to inflict my tastes on her. If she is given more than one card for the same retailer then she has the opportunity to get something more valuable. I am pleased that she will get something she actually wants and she is pleased as well. I wonder how many of your gift recipients smile politely out of embarrassment.

    In future please cut out the nastiness - or did you have a bad day at the office?

    Report on 23 January 2013  |  Love thisLove  1 love
  • Tanni
    Love rating 92
    Tanni said

    Gift cards; no chance. The nail has been deeply embedded into the gift card coffin. My advice would be to Stick to hard cash.

    Report on 24 January 2013  |  Love thisLove  0 loves
  • mambach
    Love rating 37
    mambach said

    Can said teenage grandaughter understand cash? A number of aunts and uncles and cousins would send us cash for Xmas and birthdays when I was a kid - I have fond memories of making it go as far as possible, cos when it's gone, it's gone til next year.

    Cash works like a gift card, only you can spend it anywhere - even market stalls or bargain stores. Or just possibly save it.

    Report on 29 January 2013  |  Love thisLove  0 loves
  • andrewjameshowar
    Love rating 26
    andrewjameshowar said

    Gift cards are a real pain. Very often there's nothing you want to buy, so you're buying something you don't really need just to use up the gift card.

    What about a book token................

    Report on 01 February 2013  |  Love thisLove  0 loves
  • electricblue
    Love rating 769
    electricblue said

    I'm with Latent on the whole Gift Card idea. Utterly lazy, unimaginative and pointless. If you want your recipients to choose, then give them cash or send a cheque, as well as something small but personalised to show you actually gave them some thought. I tend to buy gifts for those who matter at random times through the year. The way Christmas is celebrated these days is an abomination inflicted on the brainless and feckless. I absolutely forbid anyone in my family to buy gifts for me for birthdays or Christmas. If I want something, I'll buy it as and when suits me. Gifts of a 'I saw this and thought of you' nature are very different, but we should not rely on a commercialised and hijacked pagan festival to remind us when to think of friends and loved ones.

    Report on 21 November 2013  |  Love thisLove  0 loves
  • Latent
    Love rating 21
    Latent said

    Ok. How about making a nice card (not buying one!) and staple a £20 note to it. A gift card that is available to use at any retail outlet, not one that you choose to inflict your taste on the recipient.

    Report on 26 November 2013  |  Love thisLove  0 loves
  • easygoing
    Love rating 170
    easygoing said

    Almost a year on and some of you are still getting hot under the collar about this topic. What does it matter? I will do Christmas my way and you do it yours. As for giving cash, I prefer not to as, particularly with adults, it can get absorbed into the day to day spending and doesn't result in something special. I certainly don't need any lectures from anyone.

    As for you miseries above, I hope your ghosts treat you well on Christmas Eve.

    Report on 29 November 2013  |  Love thisLove  0 loves

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