Daily Mail Article by Adam Pavey
28th August 2012

Adam Pavey from PLS solicitors is often requested to give comments on the Daily Mail website This is Money. Recently, an article about the libor scandal received widespread media interest. In this article Adam was asked to give his opinion upon gift cards and the fact that people often forget to use them before they expire. The question asked by the reader was as follows:

“I’d like to start a campaign to stop gift cards from expiring. It is completely unfair and unjust that a company will suddenly get money in their pocket for no services rendered and no merchandise. If a gift card hasn’t been used in a certain period of time.

Who would I complained to about this and is it a legal issue? In America, class action lawsuits enable people to make claims against companies that have done something that has been judged to be illegal or unfair, is there anything similar in the UK?”

Dear Emily,

It is entirely understandable why the fact that these gift cards expire is highly annoying. It is a perfect situation for the company to find itself in. They are effectively receiving remuneration for a service or a good which they don’t even have to provide. I could imagine that this happens quite often when people simply forget that they have received one of these gift cards or possibly even when they don’t really want the gift itself.

It is quite common for these types of gifts to be given at weddings and other special occasions. Often people may receive numerous gift vouchers and so they simply forget when they expire. In terms of the legalities of the situation we are really dealing with a matter of contract law. The contract is initially between the person who purchases the gift card and the company itself. The right to benefit from the gift, which may be a good or service, is not exclusively between the purchaser and the Seller. Therefore, the benefit of the contract is effectively signed to the receiver of the gift.

As with any contract there are specific terms within. The terms within this particular contract are that it has to be used within a set period of time. There is nothing to stop such term being included within a contract. The only issue is when the contract term is not clear enough or when it is misinterpreted in some way. Therefore, whether the term is enforceable or not will depend upon how it is described within the literature.

If a person is faced with a situation in which there gift card has expired to is likely to be quite problematic to persuade the company to honour the agreement to provide a good or service. In most cases, I would imagine, that expiry date is very clear and so they would have little argument. However, it is always worthwhile writing to the company and asking them to exercise their discretion. It could be that for public relations purposes they decide to honour the contract. While this cannot be guaranteed, the old saying goes “if you don’t ask, you don’t get”.

Concerning the question of to whom you would complain, the first direction would be towards the company itself. If you felt that they had been some form of miss description then perhaps you may be able to speak with trading standards or another consumer group. The question of whether you could bring a group action is problematic. The benefit of the contract is specific to the person in question. Therefore, any group litigants would be unlikely to have the same circumstances.

The best advice in these circumstances is unfortunately to always read the small print and put a note in your diary!

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