Help! I’m no longer able to redeem my gift card

The gift card is a popular gift, certainly now that the cards are being offered at more and more outlets, including Primera, C1000 and Albert Heijn. The parties that issue the cards are often companies with a solid financial position, however, it is possible that companies can go bankrupt without warning. As a consumer this means that in some cases you are no longer able to access your credit balance – and that is a shame. However, there are ways of ensuring certainty about the credit balance on your card.

How does a gift card actually work?
When you buy a gift card you deposit your credit balance into the card issuer’s account. Basically, there are two variants – the actual retailer (for example a HEMA, Intratuin or Bart Smit store) or a party that works together with different retailers (for example the Nationale Boekenbon [book tokens] or the Podiumkaart [event gift cards]). The money is then credited to the card and can be exchanged with the affiliated retailers.

Cadeaubox and Free Record Shop
Recently things have gone wrong with some of these card issuers. On 18 April 2013 Cadeaubox suspended its activities and more than a month later it was declared bankrupt. Many catering establishments no longer accepted the card because they were concerned whether they would get paid for taking the card. Shortly afterwards, consumers became the victim of the bankruptcy of the Free Record Shop because the receiver no longer permitted the Free Record Shop gift card to be accepted as a means of payment on the firm’s website or in the shops.

Banking supervision
Cadeaubox and Free Record Shop had not placed the funds with a Stichting Derdengelden [Trust Account] or an EMI – Electronic Money Institution. An EMI is subject to banking supervision and the consumers’ funds are therefore protected. The Nationale Boekenbon [National Book Token] is regarded as being electronic money and has placed its funds with Intersolve EMI. The consumers’ funds are therefore fully protected.

The future
The popularity of gift cards is increasing. At the same time, the interest in alternative methods of payment is also increasing and banking supervision is not always arranged for those methods. Trust the company that you buy a gift card from or check that the funds are placed with a Stichting Derdengelden [Trust Account] or an EMI. In the meantime, the best thing is for the sector and regulators to continue working on securing payment transactions.