Quarter of gift vouchers will not be spent

31 December 2007

The Voucher Association reveals unspent gift vouchers are present to retailers

This year it was estimated that a billion pounds worth of gift tokens would be purchased and given out of December 25. The Voucher Association, trade body of the industry, has revealed that around a quarter of them will not be redeemed.

Vouchers are one of the top five presents given at Christmas and are ahead of toys or books. This has been illustrated in a pre-Christmas survey, carried out by the consultancy Deloitte, which saw 60% of respondents saying that they planned to give vouchers.

Chair of the Voucher Association, Andrew Johnson, spoke in defence of vouchers saying: “These days, people buy what they really want for themselves. They would much rather have vouchers than a random and inappropriate present.”

This is reflected in the current market as retailers offer gift vouchers for anything from a meal in a restaurant to a ride in a Ferrari.

However, gift tokens also come as a welcome present to the retailers. Firstly, anything that is left unspent on the token adds to the profit of the business. Secondly, when people redeem their token, they often use them as part payment for a more expensive item and so top them up by an average 40% of the voucher’s face value. Finally, the average time from being bought to then being spent is six weeks meaning that the retailer is also rewarded with an interest-free loan.