This time last year it felt a bit like the economy had been unravelled and was falling to pieces.
Just over a year ago the XL Leisure Group, including its airline, went bust. The high street also had its casualties with the collapse of Woolworths, after nearly 100 years of trading, closely followed by entertainment store Zavvi and furniture chain MFI.
A month later, on December 29 2008, Zavvi put a message on its website saying that people given Zavvi gift vouchers for Christmas would not be able to use them, with customers who purchased vouchers after 27 November being advised to write to the joint administrators because it was “expected” that they would receive a full refund.
What a horrible end to Christmas for all those people that had spent their hard-earned cash on gift vouchers, and given them to their loved ones, only to be told that they may now be worthless. Not to mention the disappointment felt by the voucher recipients.
This year is different as the UK economy slowly crawls out of recession but the problem is that these days we don’t know when it might happen again and who we may see disappear from our high streets. I know that I am now very cautious about buying gift vouchers and think I would rather give people a gift of a prepaid card loaded with money instead.
Prepaid cards offer many advantages over gift vouchers – once loaded, they can be used in any shop displaying the MasterCard or Visa sign, they aren’t related to stores so won’t become useless if the store goes bust and some even come with purchase protection.
Plus, because prepaid cards do not offer a credit facility, children as young as 10 can have their own card (with parental consent) giving them more responsibility for their spending and a source of funding in an emergency.
One word of warning – some prepaid cards carry a setup cost and monthly maintenance costs as well as fees which may be incurred on use in ATMs, or when the card is reloaded.
However, the O2 Cash Manager is free to setup, has no monthly or ATM fees and is free to reload but you do need to be an existing O2 mobile customer in order to qualify.
So for added security this year consider giving prepaid cards as an alternative to gift vouchers.
