Ros Morshead: Read the vouchers' Ts&Cs

Gift cards are a great Christmas present.

The silly season is here, and many are thinking of Christmas presents for family, friends, work colleagues or corporate end-of-year thank-you gifts. Gift vouchers and prepaid non-reloadable debit cards are some popular gift ideas, but it's worth taking a second look at the terms and conditions of using these.

Gift vouchers

Gift vouchers are great because you can make a conscious decision and choose to "keep it local", and support smaller local businesses by buying their personalised gift vouchers directly. Most gift vouchers will have no fees or charges attached - although there will be an expiry date, so do check the validity period. For businesses thinking of purchasing gift vouchers as presents or seasonal thank-yous, it may be worthwhile talking to your accountant about the accounting treatment of gift vouchers compared with other gift ideas.

However, I warn that business owners should take the time to ensure their gift voucher terms and conditions of use are clear for the business, staff and customers. I've recently heard of several misunderstandings arising where customers want cash out, or the voucher is for a specific product or item yet the customer wants something different. When terms and conditions aren't clear it can be embarrassing for everyone, so be sure to get your printed wording checked at the outset to avoid any unpleasantness.

Prepaid non-reloadable debit cards

Prepaid non-reloadable debit cards are also a great idea, so long as consumers are aware upfront of the cost to purchase the cards, various fees and ongoing charges. Cards also have an expiry date. I asked the issuer of one of the more well-known prepaid non-reloadable debit cards about their terms and conditions, and they told me theirs are clear: card-holders are pre-paying for the right to purchase goods and services up to the value available on the card, but the card cannot be used to withdraw cash, or redeemed for cash. This means cardholders can ONLY use the credit for purchases online or over-the-counter.

On that basis, the easiest way to use up any debit card credit balance is to ask the retailer if you are allowed to make a split payment at the time of purchase. This way you can use up the balance on your card toward your purchase, and complete the remainder of your purchase using another payment method. So, do make sure the terms and conditions of any gift vouchers your business may issue are clear; and if you receive a gift voucher or debit card as a gift, do use it in the spirit for which it was intended.

-Ros Morshead is a solicitor and principal of Morshead Law.