Gift cards are a multi-billion dollar industry in Australia, and despite recent efforts to clean up the industry, consumers are still losing millions in unspent gift card cash each year.
Last week, Jeanswest announced it was entering voluntary administration, and consumer advocates are urging customers with gift cards for the store to spend them before it's too late.
The national retail chain was started in 1972 and currently has 146 stores across Australia, with 988 employees.
Jeanswest's decline follow the collapse of a slew of Australian retailers over the past year including Harris Scarfe, Karen Millen and Bardot.
Western Australia's Commissioner for Consumer Protection Lanie Chopping urged Jeanswest customers to use their gift cards sooner rather than later.
“Administrators can change the terms and conditions of the gift cards which, in the past, has meant that some customers must make further purchases in-store before they can redeem the value of the gift card," Ms Chopping warned.
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“This is why we always recommend consumers who receive gift cards spend them as soon as possible.
Ultimately, we recommend people buy a gift or give cash rather than risk giving a gift card that may get discarded or forgotten about.”
With a number of businesses facing financial difficulty, consumers should take precautions to avoid losing out, Consumer Protection said.
“Avoid paying large deposits and never pay the total amount upfront. Staging payments for work completed or goods delivered is often a more sensible approach," Ms Chopping said.
"Credit card chargeback rights may provide a level of protection in the event of non-delivery of goods but by paying a small deposit and the balance upon delivery, any potential losses are minimised.
“When retailers shut down, consumer guarantees on goods must be honoured by the manufacturer so claims for repairs or replacements should go to them direct.”
Gift card industry forced to clean up act
Australia's multi-billion dollar gift card industry was recently forced to clean up its act somewhat.
In November, national legislation closed the loopholes on dodgy gift card tactics – laughably short expiry periods and teeny-tiny print for terms and conditions.
Now, all gift cards must be valid for a minimum of three years, with the date clearly visible, and sellers aren’t allowed to whack on post-purchase fees.
Comparison site RateCity recently rated Bunnings as the most generous with its gift card offering – there’s no expiry date, and you’ll get paid out in cash if your balance is below $10.
Shopping centre Westfield was slammed as the worst value gift card, with up to $5.90 in fees and postage, a $2.95 service fee, and $2.95 delivery.
Anything pre-loaded with cash is usually a rip-off, RateCity found, pointing to Coles and Australia Post’s Mastercard gift cards as prime examples.
Both can only be bought in their respective stores, and adhere to the slated three-year expiry guidelines – not a day more.
The Coles card costs $5, while the Australia Post one costs $5.95, then whatever money the buyer loads onto it.
Gift card tips
Read the terms and conditions before you buy.
If you have an expired card, ask the store to honour it.
Don’t spend extra money, just for the sake of getting your balance down to zero – if your balance is under $10, ask for it back in change.
If you have a few dollars on your card and you can’t get it in cash, pay it forward to someone else in the queue.