As the festive season approaches, many people would select gifts for family and friends to express their feelings. As compared with traditional cash vouchers, e-gift cards have become increasingly popular in recent years as they are more convenient and flexible for both the giver and the recipient. The purchaser could select the face value and send it electronically, while the cardholder could use the remaining balance for the next purchase. In case the e-gift card is lost or stolen, the consumer could try to ask the trader for a replacement by producing proof of purchase, which offers greater protection for them. The Consumer Council reviewed the e-gift cards of 10 retailers and found discrepancies regarding purchase method, usage, report of loss and refund arrangements, as well as various terms of use. For example, the physical store or online store of 3 traders required the cardholder to log in or register as a member before using the e-gift card, whereas some retailers would restrict the number of e-gift cards usable per transaction, or only allow it to be used for online stores only, which may not be the most convenient for consumers. Furthermore, the e-gift cards of 4 traders only had a validity period of about 1 year, which is in sharp contrast to the cards of 3 other traders that had no expiry date. In dealing with an unspent balance remaining in the e-gift cards, the actual practice of a trader was different from its own stated terms and conditions, potentially causing confusion for consumers. Consumers should also be aware that e-gift cards are a form of prepayment consumption, and in the event that a business closes down, the cardholder might only be able to seek compensation as an unsecured creditor, thus reducing the chance of recovering the funds in full. Therefore, consumers are advised to refrain from stockpiling or saving up e-gift cards. Instead, consumers should use them as soon as possible upon receipt, and read and understand the relevant terms governing its scope of use.
The Council had earlier selected 10 retailers that sold e-gift cards in Hong Kong for the survey, based on their rankings in search engines. 6 of the retailers were under the category of “fashion and sportswear” and the other 4 were under the category of “household items, toys and accessories”. The e-gift cards sold had a face value ranging from $50 to $11,000 each. Subsequently in trials conducted from August to September 2024, Council staff posing as ordinary consumers purchased and put to use the e-gift cards of the 10 traders, and consolidated information on the services provided by gleaning information from their websites, terms of use and customer service channels.
1 Trader Did Not Display Information of the Sender with the e-Gift Card
Most Traders Did Not Notify the Purchaser of the Receipt of the Card
In purchasing e-gift cards for family and friends, it would be reassuring to know that they had been properly received. 8 out of 10 traders were able to deliver the e-gift cards to the recipients’ email addresses directly or through customer services, based on information provided by the purchaser. It is the purchaser’s responsibility to check and verify the accuracy of the recipients’ email addresses, otherwise the e-gift cards may not be properly delivered. Purchasers could choose to provide their names or customised messages to let the recipients know their identities. However, 1 trader failed to provide the purchaser’s name or message when sending out the e-gift card and accompanying email, thus the recipient might not know the identity of the sender. Of the 8 traders that would send e-gift cards to the recipients, 7 of them would not notify the purchaser whether the recipient had viewed the e-gift card, therefore the purchaser would have to find out from the recipient themselves. The remaining trader provided a more satisfactory arrangement by notifying the purchaser once the recipient had read the e-gift card, and furthermore, if the intended recipient had not checked their email within 15 days of delivery, a reminder message would be sent to the purchaser. This good practice should be followed by other merchants.
Some Posed Restrictions on Number of e-Gift Cards Usable and Eligible Shops
3 Traders Required Account Registration
All 10 traders allowed consumers to use more than 1 e-gift card for settling the payment, and 5 of them did not limit the number of e-gift cards usable, yet 1 trader would only allow the use of a maximum of 4 e-gift cards for each online transaction while no such restriction would apply for its physical stores. In addition, 4 traders did not explicitly state the maximum number of e-gift cards usable, showing a lack of transparency. Hence, consumers should enquire with the traders beforehand to avoid unnecessary disputes. Consumers should also be aware of the scope of use of e-gift cards, as 4 traders only allowed these cards to be used at online stores and not physical stores. Also, as some merchants would charge for shipping on online purchases, consumers could, if possible, choose to collect orders from physical stores to save on these costs. 1 trader specified that the e-gift card could not be used with its wholesale partners or at concession stores which are also commonly known as “shop-in-shops”. Furthermore, only 1 trader allowed the use of its e-gift card at some overseas stores and online stores of the same brand. In the event that consumers gifted a card only valid for local use to overseas friends and family, they might end up having to choose another gift.
Most e-gift cards were easy to use, but 1 trader stipulated that in-store customers must bind the e-gift card to a membership account before use. The online stores of another 2 traders required consumers to register or log into their accounts before using the e-gift cards, which might cause inconvenience to consumers who do not wish to open an account. The Council recommends these 3 traders to consider lifting all such requirements to simplify the use of e-gift cards.
Validity Period as Short as 1 Year
Unused Balance Generally Could Not Be Redeemed as Cash Upon Expiry
The e-gift cards of different traders could have considerably different validity periods, with only 3 traders clearly stating that there was no expiry date, and the e-gift cards could be used until the balance is used up. 3 other traders set a validity period between 2 years and 5 years, whilst another 4 traders set a validity period of only about 1 year. Out of these, 1 trader, which is a sports goods store, did not even state the validity period in the e-gift cards or in the emails to the customer, demonstrating an undesirable practice. Consumers holding that card are advised to enquire with customer service and jot down the expiry date themselves so as to prevent being unable to use the e-gift card due to expiration.
Some overseas jurisdictions regulate the validity period and cash redemption arrangements of gift cards while Hong Kong has no such regulatory regime at present. Hence, if there is an unspent balance within the validity period, it generally cannot be refunded or redeemed for cash. However, according to the Council’s user trial, it was found that the actual practice of certain traders differed from their stated terms and conditions. For instance, a trader stipulated that if the remaining balance of an e-gift card was less than US$10 (or the equivalent in local currency), or as required by law, the balance could be refunded in cash, but during the trial when the Council staff asked for a refund of the remaining balance of HK$20 (around US$2.56), the retail shop staff claimed that they did not know of the arrangement, an overt contravention of the usage terms and conditions. In addition, consumers should keep their card numbers, bar codes and emails secure, and never share screenshots of their e-gift cards with others through social media or messaging apps to prevent unauthorised access or use. 7 traders clearly indicated that if the e-gift cards were stolen or lost, no replacement would be issued, but 1 of these traders stated that this might be handled in special circumstances; the remaining 3 traders stated that they could offer assistance, and purchase records might have to be produced and verified, hence consumers should keep their purchase receipts and other records properly. However, if a trader has indicated that they would not be responsible for the loss of an e-gift card, then the trader would have the final decision on whether to reissue the card. Consumers also have the responsibility to keep their e-gift cards safe.
e-Gift Cards Are a Form of Prepayment Consumption
Cardholders Should Use Them Promptly and Refrain from Hoarding
Some consumers, upon receiving e-gift cards, would wait for a coveted item before buying it with the card. However, e-gift cards are a form of prepayment consumption, and if the trader shuts down, the cardholder in general can only claim compensation as an unsecured creditor in bankruptcy or winding-up proceedings. In the event of insolvency, full compensation would be unlikely, leading to losses. Hence, e-gift cards should be used as soon as possible. If in possession of more than 1 e-gift card from the same trader, the card that expires earlier should be used first, followed by the ones with longer validity periods; hoarding of e-gift cards should be avoided.
Consumers who purchase e-gift cards and traders that sell e-gift cards can make reference to the following recommendations:
- Traders are responsible for making clear the terms of use and service details when selling e-gift cards, and ensuring that the information is accurate and consistent. This helps cardholders understand the usage terms and prevents consumer disputes;
- Consumers should double-check the email address of the recipient prior to purchase, and keep the receipt in case of need;
- Record down the expiry date of the e-gift card and set relevant reminders, whilst regularly checking the remaining balance of the card to monitor for any suspicious deductions or transactions;
- Keep the email containing the e-gift card safe, and do not share the barcode or screenshots of the card online to prevent unauthorised access or use.
Download the article (Chinese only): https://ccchoice.org/576-e-gift-card
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