Thinking of giving Gift Cards for Christmas? Avoid the traps

Published on December 17, 2019 10:59 pm, by

Gift cards seem like a great way to make Christmas shopping easier. You simply shell out the cash (or pay for the card using another card!), the recipient can purchase something they really like and you get the joy of giving and credit for the thought. After all, it’s the thought that counts right?

Other than the fact that gift cards don’t really demonstrate a lot of thought, there are other issues to be wary of. The ACCC estimates that Australian consumers waste about $100m a year on unused gift cards. The key issues we see with them are:

  • Most of them have expiry dates – which seems ridiculously unfair – so if they aren’t used before the expiry date they become invalid
  • Most will have significant limitations on where they can be used – generally only with the retailer that issues them
  • Some have fees and charges that can make them expensive relative to the overall value of the card

In short, in a lot of cases, we think you’d be better off just giving people the same cash value and a nice card!

Here is our summary of gift cards available ranked roughly from best to worst.

Bunnings cards have no expiry date and if you buy the card in-store or purchase an e-card there are no fees or charges. Delivery by post costs $2.60 (standard) or $4.55 (express). The only obvious downside of a Bunnings cards is they can only be used at Bunnings, otherwise, they are a good choice.

Woolworths has also removed expiry dates from their cards. Woolworths cards can be used online and in-store at Woolworths, Big W, Dan Murphys, BWS, Cellar Master, and Caltex Woolworths. e-Gift Cards can be purchased online with no fees or charges. Delivery by post costs $4.50 (standard) or $14.99 (express) – which is pretty expensive.

Australia Post Gift Cards
Australia Post Gift Cards are pre-loaded Master Card debit cards. You can buy them in-store. There is an upfront purchase cost of $5.95 which can be expensive if you are buying a low-value card. The upside is that because it’s a MasterCard you can use it anywhere that accepts Mastercard. Unfortunately, these cards have a 3-year expiry.

Coles Gift Cards
Coles offers a number of different gift cards. Some seem to be store specific and seem to be usable across the entire Coles group of companies. It probably makes the most sense to stick with the Coles Group and Myer Card unless you specifically want to restrict where the card can be used by the recipient. They are available by email or as physical plastic cards. The delivery fee for plastic cards is expensive at $14.85 so best to stick with the email cards if you can. Unfortunately, Coles cards have an expiry date 4 years after the issue date. Given their main competitor has removed expiry dates it would be a nice move for Coles to do the same. Coles cards can be used at stores in the Coles Group including Coles, Coles Express, K-Mart, Target and Officeworks

Westfield Gift Card
Westfield Gift Cards are available for purchase at Westfield stores. There is a $2.95 fee per card and the card expires 3 years after it is issued. You can only use the card at retailers in the Westfield centre and not all retailers may accept the card.

Finally, if you are buying gift cards, don’t pay full price for them – because almost no-one has to pay full price for them. Use a rewards program, motoring club, super fund or health fund you belong to and buy the cards at a discount (which is usually about 5% of the face value of the card).

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Peter is the CEO of MoneyBrilliant. He has over 20 years experience in banking, insurance and accounting. Peter has three sons, ranging in age from 16 to 3, is a sport and fitness fanatic and a volunteer firefighter. He is passionate about improving people's lives through making financial services more accessible.

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