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About July 2018, my friend received a $50 Westfield gift card because she did somebody a favour. So she went to Westfield Shopping Centre in Hornsby to purchase an item. When she went to pay for it and use the Westfield gift card as part-payment, it was declined. Apparently this card has to be activated if it was purchased somewhere other than from the Westfield Concierge service at a Westfield shopping centre.

I was asked to chase this up for my friend. I rang Westfield Gift Cards and I was told that to get this card activated, my friend would have to go to the person who bought it and ask them to provide the proof of purchase by way of the receipt or bank statement. I would think that the person probably bought this gift card from a supermarket along with her shopping and I cannot imagine that she kept the receipt, especially after a few months. And I certainly don't think that my friend should put her friend through the trouble of going to the store with her bank statement, just to activate this $50 gift card.


The female Westfield Gift Cards person to whom I spoke admitted that this sort of thing happens all the time. It's a wonderful scam where a large percentage of these gift cards are not redeemed or used for one reason or another and the company just keeps the money. It is estimated that around $2 BILLION is lost every year by people who fail to use gift cards for one reason or another.

Companies that issue these cards love them, because it's like the Dire Straits song "Money For Nothing" and that's what they get - for the price of printing a cheap piece of plastic, they can count on hordes of people who bought them never actually using them and those companies really get money for nothing.

In any case, who the hell has got the time to read the fine print on the paper to which the Westfield gift card is stuck, especially when they are shopping for food and groceries and just grab the card from the gift card rack and have it included in their shopping? Nobody has time for this sort of crap.

Apart from anything else, most gift cards and gift vouchers expire and if you don't use them within the valid timeframe, you can kiss your money goodbye. There is also the risk that the issuer can go broke and then the card becomes worthless. This happened to me when I received a $100 Angus and Robertson gift card and almost immediately afterwards, that company went out of business. Here are a few companies that went broke, rendering their gift cards and gift vouchers worthless.

And then there's the gift card scam, where people who received gift cards are required to spend the equivalent value in cold hard cash before the stores actually honour the gift cards. This happened to me when bookseller Angus and Robertson was put into administration shortly after I received one of their gift cards. When I went to spend the gift card, I was told that I had to spend the equivalent amount ($100) to have the store redeem the gift card, yet the store was still trading as normal. I was outraged, but this is the way that the scam works when stores that issue these cards try and squeeze as much money out of customers before they finally go to the wall.

What people do not realise is that a gift cardis actually an "Unsecured Creditor Card". What that means is that as soon as you purchase a gift card, you become an unsecured creditor of the company that issued it, just like shares in that company. If the company goes out of business, you might be lucky and get some of your money back, after all the secured creditors - such as banks and mortgagors - are paid out. Mostly you will get nothing at all, but occasionally if the administrators who are winding up the company have a few dollars left over after all the secured creditors are paid, then you might get a cent in the dollar refunded to you.

The same scam was operated by the administrators of furniture and fashion company Laura Ashley. The stores continued to trade, but customers who had Laura Ashley gift cards were told that they had to spend the equivalent amount in cold hard cash as the value of the gift cards. Obviously the administrators were trying to wring hard cash out of customers by blackmailing them by making their gift cards worthless unless they blew the equivalent amount in the stores.

South Australian long-time customer Carole Morgan of Summertown said that she was angry and upset after staff at the Burnside store advised her of the instructions from administrators to spend double. "My husband gave me a $150 Laura Ashley gift card for Christmas and they said they would only accept it if I spent the same amount in cash. Those cards were being sold right until two days before Christmas," she said. "I have been a loyal customer for years. I want as many people as possible to understand whatís happening - they want us to spend double. I am so upset and annoyed. I understand itís not the staff that are at fault but this is just outrageous. The fine print on the card says to treat it as cash."

A spokesperson for the administrators said that they were giving the "unsecured creditors" a chance to use the gift card by honouring it with conditions. "Even though it is not a legal requirement or ordinary practice in a situation where a company is in administration, the administrators recognise the impact that this has on Laura Ashleyís valued customers," a statement said. "Therefore, the administrators are allowing Laura Ashley stores to honour existing gift vouchers, subject to certain conditions. The company will recognise the value attributed to outstanding vouchers on a dollar for dollar basis for any new purchases."

The Angus and Robertson and Laura Ashley fiasco merely proves that gift cards are either completely worthless if the store that issues them goes broke, or the administrators will keep the store trading to squeeze every cent out of people before they slam the doors shut, but will blackmail gift card holders into throwing good money after bad, in order for them to honour those gift cards tha were bought originally for cold hard cash. Those stores were happy to take cash for those cards, but rendered them worthless or vehicles for blackmail and that is a bloody disgrace and should be outlawed.


If you get a gift card, tt is very easy to forget that you have it and in fact one out of seven gift cards have money still on them when they expire, so again it's a situation of "Money For Nothing" for the card issuers. But there are a number of ways to deal with this, as follows:


Beware of hidden fees on some gift cards. In one case history, a person went to use a $50 gift card and found that there were insufficient funds at the checkout, He logged on to the gift card account to check the balance, which was down to $37.50, as there was a recurring $2.50 "account maintenance fee" The person lost $12.50 worth of value because he took his time using the card.

In another rip-off, a person received a gift card for a local camping store for Christmas. In January, the store rebranded under new ownership, and when he tried to use the gift card in February, the rebranded store would not accept it because it had the old branding on it. The card was in-date and was purchased at that exact store, but the store just refused to honour the card. They would have known the rebrand was coming when the person's father bought the card in December and they should have told him then. So the gift card was completely worthless.

One person found that $100 in iTunes vouchers that he sent from NZ for Christmas presents to family in Australia were unredeemabe in Australia. And then there are gift cards for events and experiences. A couple bought a gift card for a one-on-one platypus experience through Red Balloon. When they realised that it had one month's validity left, they went to book in to the experience. They were told that this particular experienceswas booked out for months and that the voucher had to be valid not just at the time of booking, but at the time of the actual event.


So let this be a warning to you. DO NOT BUY GIFT CARDS. But in particular, DO NOT BUY WESTFIELD GIFT CARDS. If somebody buys such a gift card from a supermarket and sends it to you without activating it, trying to activate it months later is virtually an impossibility and you might as well throw it in the bin, knowing that the card issuer is keeping the money that should rightfully be yours. I consider the whole gift card system to be a monstrous multi-billion dollar scam.

If you need to give a gift like that, give good old money. It doesn't have an expiry date and people are not restricted in where they can spend it. Slip $50 or $100 into a greeting card and itís a thousand times better than buying a gift card and finding out that itís worthless.