When do gift vouchers actually expire?

When do gift vouchers actually expire?

It’s been a sore point with consumers for years. Someone gives you a gift voucher, you put it aside, meaning to use it soon, you forget, then when you try to find it in that ‘safe place’ you can’t.


Then you find it and notice that it expired the previous month.

So you call the beauty spa or the shoe shop anyway, and you’re told “sorry, we can’t help you - it’s expired.”

As one outraged Capetonian once said to me: “Hey! The money didn’t expire in their till!”

I’m pretty sure the legal people who were tasked with drafting the Consumer Protection Bill had some personal experience of this and were pretty peeved about it, too, because the first draft of the Bill required companies which issued pre-paid vouchers to honour them for at least five years!

As you can imagine, there was some backlash from industry and the legislators settled on three years. Yes, a pre-paid voucher must be valid for at least three years.
But you wouldn’t believe how many vouchers are still being issued with a validity of 12, six or even three months.

The attitude is "you snooze you lose, time’s up and we going to keep your money, and give you not a thing in return".

Ironically, I was given a voucher for a foot treatment for my birthday in April - valid for six months.

I think in the case of some of the smaller service providers they just haven’t thought to check that their practices are Consumer Protection Act compliant, but any oversight which prejudices the consumer is unacceptable.

Which brings me to the case of the week.

How this customer almost forfeited a R600 gift voucher 

Andre Reddy was given a R600 gift voucher for seafood restaurant Jack Salmon Fish House in Glenashley in early December, valid for six months.
He lost the voucher for a while, and only found it a few weeks ago.
When he tried to redeem it at the restaurant earlier this month, the manager refused, saying the voucher had expired.
So he wrote to the owner, Jason Roberts, who responded by saying he’d “kindly allow” him to redeem the voucher, but pointed out that “the reason we have an expiration date on these vouchers is due to rising costs of ingredients”. 
"Due to this we have had to increase our menu prices.”

I must stress that Roberts agreed to allow Andre to redeem the voucher before I got involved.

But his logic was a bit flawed in this case, as the voucher is for a Rand value - R600 - so by redeeming it eight months after it was issued, and after inevitable menu price hikes, he - that’s Andre - loses out, not the restaurant, because that R600 buys him less now than it would have in December.

It’s why companies which issue pre-paid vouchers do so mostly in Rand values, not for specific products or treatments, so that they don’t lose out if the voucher is redeemed two or three years later, when the prices of that treatment or meal have gone up substantially. Fair enough.

I pointed all this out to Roberts, along with the CPA’s stipulation that all pre-paid vouchers be valid for at least three years,  and he sounded genuinely surprised by the three-year thing.

“Thanks for that, Wendy!” he said.

“I agree with all points that you’ve raised. While I have the remaining vouchers I will put the expiration date as 3 years from time of purchase and once they are all issued, I will scratch the expiry date completely.”

As company responses go, that gets a gold star. Brilliant.

Consumers and supplier alike - please get this: the time for pre-paid vouchers which expire in three or six months is long gone. Three years. That’s how long you must honour them for.

The most common questions asked 

There are two questions which I always get asked when I talk about pre-paid vouchers.

1. What about pre-paid data? How come the networks “wipe out” your pre-paid data if you don’t use it within a month or so?

The networks are relying on a legal interpretation of this section of the CPA, which is essentially that once the voucher is loaded, is it deemed to have been redeemed or “spent” and the value of the airtime or data can then expire within one to three months.
As I’ve said before, that’s a bit like trying to convince someone that unwrapping a bar of chocolate is the same thing as eating it.
But none of the authorities are challenging them on this, sadly.

2. What about Groupon/Daddy’s Deals-type vouchers - why do they always have short validity periods; typically three months? Is it legal?

These vouchers are slightly out of the ordinary in that they are for ‘promotional’ goods and services, and the Act has no such stipulation on promotional vouchers. 
Some companies have tweaked their terms and conditions to come up with a compromise solution to this issue: they’ve made the VALUE of the vouchers valid for three years. 
In other words, if you don’t use your voucher within the three months, or whatever, you must ask to be credited with the value of that voucher, which you can then use on any other voucher offering within three years of your initial purchase. 
But don’t assume that all group discount schemes have this policy – read all the small-print terms and conditions carefully before opting in.”

The National Consumer Commission endorsed this compromise when I first investigated this issue.
I recently asked Consumer Goods & Services Ombud Neville Melville for his view. He said: “As long as the consumer gets value for that payment, or their money back, the intention of the section (on pre-paid vouchers) has been met.”

So there you have it. 
Don’t fall for any old ‘expiry’ story. Knowledge is power.

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