Why a Gift Card is the best Covid-friendly present this Father’s Day
Father's Day is a chance to honour the special men in our lives. They don't need to be your dad, or grandad, they can be anyone's dad or not even a dad. And if you don’t really have the time or fresh ideas to go hunting for something specific - how about grabbing a gift card for him to spend as he wishes. We’re letting you in on our tips for this practical and thoughtful hack on giving a gift.
If you are looking for a convenient and no-brainer kind of gift - a gift card is what you need. Gift cards are super popular all-round. We love giving gift cards because they say to the recipient 'I'm thinking of you'. Along with a dollar value we set and without requiring us to take a punt on selecting a specific gift that the recipient might not like, and may not be able to easily return during Covid. Recipients love a gift card when it can be use to pay for a larger item of their choice. Retailers love gift cards because if they aren't spent, it’s pure profit for the company.
Buying a gift card for a Covid Father's Day
Will you see your dad in person?
Lucky for us in lockdown, we have the choice of a physical or digital gift card. Physical are plastic cards that you buy directly from the shelves of retail stores. If you want something to hand over or want to include it with another present, set out to buy a physical gift card.
Digital gift cards, on the other hand, are virtual gift cards that are purchased online. If you’re looking for convenience, this type of gift card is easier to get. It can be delivered to the recipient instantly via e-mail or other online messaging platforms. This means you can buy it late at night, even when shopping centres are closed, or at the last minute. Most digital gift cards come with a unique code that is used to redeem it. That means digital gift cards are more secure and are less likely to be lost or stolen.
How well do you know your dad's shopping habits?
You can also choose between open-loop or closed-loop gift cards. Closed-loop gift cards can only be redeemed from the retailer or brand which issued the card. While an open-loop gift card can be used to buy from a group of retailers or brands, as long as they honour the card. A VISA gift card, for example, can be redeemed at any store where VISA is accepted. If your special fella has a shop he loves, buying a gift card from that retailer show how well you know his taste. But if you're not sure or want him to try something new, consider buying a gift card that can be used at various retailers.
Gift Card expiry
The good news is any gift card you buy for this year's Father's Day should be redeemable post-Covid. That's thanks to laws that were introduced in Australia from November 1, 2019. Any gift cards purchased since that date must be valid for a minimum of three years from the dates they were issued or purchased. Short redemption periods are now a thing of the past.
These laws also require that all gift cards prominently display the expiry date. If it does not expire, it must also be stated clearly in the gift card.
The store does not need to honour an expired gift card. But it is always worth asking if the expiry can be extended if the final date has lapsed. Or better yet, ask if a new card can be issued — either in-store, over the phone or even by email. Some big chains such as Woolworths, JB Hi-Fi and The Good Guys have responded to customer complaints by getting rid of expiry dates. We also recommend setting some calendar reminders to ensure the full amount is used before the card's expiry
Most digital gift cards allow you to check the remaining balance and expiry on the website or online store where you purchased it. However, checking the balance on physical cards varies - you may be asked to visit their website, call their hotline, or have the balance checked at an physical store.
Are there any possible fees I can incur while using a Gift Card?
Thanks to the new Australian laws, cards purchased after November 1, 2019 should not include post-supply fees. A post-supply fee is a fee that reduces the value of the gift card. Examples of fees that are no longer allowed include:
- card activation fees;
- balance checking fees;
- monthly account keeping fees; and
- fees charged if the card is inactive for some time.
However, businesses can continue to charge upfront fees on the purchases of gift cards, as consumers can ask questions and make informed decisions about these fees while purchasing them.
You need to watch out for these allowed charges:
- Booking fees, where those booking fees are the same, or substantially the same, as fees or charges for making a booking using a payment method other than a gift card.
- Fees for exchanging currencies.
- Charges related to the reissue of a gift card that has been lost, stolen or damaged.
- Payment surcharges.
You can find out more about post supplies fees and other regulations on the ACCC website.
Are Gift Cards taxable and tax-deductible?
Yes, your gift cards are taxable and tax-deductible. The amount that is used to purchase tax-deductible items can be claimable.
If your gift cards are issued for employees, they are considered cash-equivalent items. Like cash, you must include gift cards in an employee's taxable income, regardless of how little the gift card value is. We have more tips on filing your tax returns here.
Lost or Stolen Card, can I still redeem its value?
Usually, if you lose your gift card or it is stolen, it can not be replaced, refunded, and businesses won’t allow you to redeem them, especially if you fail to register them under your name. Some retailers may allow you to cancel or re-issue a lost or stolen card but charge you a corresponding fee. Terms and conditions for these situations vary across different businesses, so be sure to check the terms and conditions before you buy.
Refund or return policy on Gift Cards
In general, if you've bought a gift card by mistake, it cannot be returned for cash. If you've accidentally purchased or received a gift card that won't be of any use to you, try re-gifting it to someone whom you are certain would use it.
But if you purchase an item using a gift card and it needs to be repaired, replaced or refunded, the store must honour your consumer rights, just the same as they would if you purchased the item with cash or credit.
Also, the store can have a policy that requires refunds for items purchased on a gift card be issued onto a gift card.
Pros vs Cons of Gift Cards
Gift cards may be convenient, but they also have downsides. If you’re looking to buy a gift card for Father’s Day or any other celebration, here’s a list of some pros and cons to help you make a better decision:
- They are easy and convenient to purchase and give.
- A Gift Card take the guesswork out of choosing the perfect gift.
- The recipient can buy what they want, when they want it, including life's necessities like food.
- Having a gift card on you can be a substitute payment method or a life-saver when you forget your cash.
- A longer expiration period and banning of post-supply fees have reduced the amount of gift cards being wasted.
- It may look like an impersonal and unthoughtful gift.
- Closed-loop gift cards can only be used in specific stores.
- You cannot return gift cards or be refunded for cash.
- Small balances left unused on gift cards may result in money wasted.
- Most gift cards won't be replaced, refunded or allowed to be redeemed if lost or stolen.
How to spend every dollar!
If you decide to purchase a gift card or have received one recently, make sure to get the most from it! Here are easy tips on how you can get the full value from a gift card:
- Choose one that can be redeemed in multiple stores unless you know the recipient will absolutely shop from a specific store.. You're aim is to increase the likelihood that the card will be used.
- Take note of a gift card's minimum spend amount. If there is one, buy a card elsewhere if you can.
- Look for a card that allows you to use it for an unlimited number of transactions until you've spent the whole amount. The bearer may not be able to use the amount left on the card if the retailer doesn't give a change or allow multiple purchases with one card.
- Double-check the expiry periods before purchasing a gift card. Don't buy one with less than three year expiry!
- Consider digital gift cards as they are more convenient, secure, and may improve the redemption rate.
- Watch out for retailers that distribute low-value gift cards as marketing. An example is if I receive a $20 gift card but the minimum spend is $80, I won’t use it unless I already plan to shop there.
- Set calendar reminders every six months to jog your memory on using your gift money.
- Value your gift card like cash – don’t damage and lose it!
Feel like something’s off?
Shopping with gift cards is just like holding cash, but facing difficulties and unnecessary fees can be a real hassle. If you experienced any problem in redeeming your gift card, such as getting one that does not follow the three-year expiry period or being charged with unnecessary fees, tell us and we’ll ensure you don’t waste your money. We are here to help you handle it, let us know the details of your complaint, and just say the magic words 'Help Me Handle It'.