Gift cards and vouchers are everywhere in the UK. They make popular presents, workplace rewards, and promotional offers. But most people don’t realise you can buy them at a discount, sell ones you don’t want, or lose money if you’re not careful.
What Are Gift Cards?
A gift card is a pre-loaded card or voucher that holds a specific cash value. You can spend it at a particular retailer or group of retailers. They come in two main forms:
- Physical cards - Plastic cards you buy in-store or order online. They look and work like debit cards at the till.
- E-vouchers - Digital codes sent to your email or loaded onto an app. You show the code at checkout or enter it online.
Most UK retailers offer gift cards, from supermarkets and department stores to restaurants and online shops. Some are multi-retailer (like One4all or Amazon gift cards) while others are retailer-specific.
Where to Buy Gift Cards
- Directly from the retailer - In-store at the till or online through their website. You choose the amount and pay by card or cash.
- Supermarkets - Tesco, Sainsbury’s, Asda, and Morrisons all stock gift cards for dozens of brands. You earn Clubcard or Nectar points on the purchase price.
- Online platforms - Websites like Gift Cards Direct, Tesco Gift Cards, and Amazon sell e-gift cards for immediate delivery.
- Whsmith, Post Office, and newsagents - Stock popular gift cards for high street brands and restaurants.
Restrictions to Know
Gift cards aren’t cash. They come with rules you should understand before buying or using one:
- Expiry dates - Many gift cards expire after 12 to 24 months. Some retailers have no expiry date, but this varies. Always check the terms.
- Single retailer - Most gift cards only work at one retailer or a small group. A Next gift card won’t work at John Lewis.
- No change given - If you spend less than the card value, you won’t get the difference back in cash. The remainder stays on the card.
- Non-refundable - You generally can’t return a gift card for a refund once purchased.
- Online vs in-store - Some gift cards only work in physical stores, others only online. Check before you try to use one.
Buying Discount Gift Cards
This is where gift cards become a genuine money-saving tool. You can buy gift cards for less than their face value from secondary market platforms.
How It Works
People and businesses sell unwanted gift cards at a discount. You pay, say, £85 for a gift card worth £100. When you spend it, you’ve saved £15. The discount varies by retailer, demand, and how close the card is to its expiry date.
Where to Buy Discounted Gift Cards
- JamDoughnut - A UK app that sells discounted gift cards for hundreds of brands. Typical discounts range from 2% to 15%. You buy through the app and use the e-voucher in-store or online. Popular categories include supermarkets, restaurants, fashion, and electronics.
- Cardyard - A UK website where individuals sell their unwanted gift cards. You buy at a discount and Cardyard holds the payment in escrow until you confirm the card works. Discounts typically run from 3% to 12% off face value.
- Zeek - An app and website offering discounted e-vouchers and gift cards for UK retailers. Works similarly to the others, with discounts that change based on supply and demand.
Real Savings Example
You’re buying a £200 Argos gift card for a new TV. On JamDoughnut, you find it at 6% off:
| Detail | Amount |
|---|---|
| Face value | £200 |
| Price paid | £188 |
| Saving | £12 |
Do this regularly across your regular shopping and the savings add up. If you spend £500 per month on groceries and buy Tesco gift cards at 4% off, you save £240 per year.
Selling Unwanted Gift Cards
Got a gift card you won’t use? You can sell it for cash rather than letting it go to waste.
Where to Sell
- Cardyard - List your gift card and set your asking price (usually 80% to 95% of face value). Once a buyer purchases it, Cardyard verifies the card and transfers the money to your bank account.
- Zeek - Similar process. You sell your unwanted gift card through the platform and receive cash minus a small commission.
- Preloved or Facebook Marketplace - You can sell directly to individuals, but there’s more risk. Meet in a public place and verify the card balance before handing it over.
Tips for Selling
- Sell promptly - A gift card closer to its expiry date is worth less.
- Check the balance - Confirm the full value before listing it.
- Price competitively - If similar cards are listed at 10% off, you’ll need to match or beat that.
- Factor in fees - Some platforms charge a commission or listing fee.
Protecting Your Gift Cards
Gift cards are treated like cash by fraudsters. Take these steps to protect them:
- Keep the receipt - If you buy a physical card, keep the receipt. If the card is lost or stolen, some retailers will replace it if you can prove purchase.
- Register the card - Some retailers let you register your gift card online. This links it to your name so it can be replaced if lost. Not all retailers offer this, but it’s worth doing where available.
- Treat them like cash - Don’t leave gift cards lying around. Store them in a safe place, the same way you would a £50 note.
- Check the balance regularly - Use the retailer’s website or call their customer service to check your remaining balance. This also helps spot any unauthorised use.
- Don’t share the code - Never send a photo of your gift card code to anyone. Scammers use these codes to drain the balance.
Tips for Getting the Most from Gift Cards
- Use them before they expire - Set a reminder on your phone a month before the expiry date. Don’t let the value expire unused.
- Check your balance before shopping - Know exactly how much is on the card so you can plan your purchases accordingly.
- Combine with sales - Use gift cards during Black Friday, Boxing Day, or seasonal sales to stretch the value further. A £100 gift card buys more when items are discounted.
- Stack with cashback - Buy through a cashback website to earn extra money on top of any gift card discount.
- Buy for yourself at a discount - If you know you’ll spend at a particular shop anyway, buy a discounted gift card first. It’s free money.
- Don’t overbuy - Only buy gift cards for shops you actually visit. A discounted gift card for a shop you never go to is still money wasted.
Tax on Gift Cards
Gift cards can have tax implications, especially in a workplace context.
For Employers Giving Gift Cards to Employees
Under HMRC rules, gift cards given by employers are treated as benefits in kind. This means:
- The value of the gift card is added to the employee’s taxable income.
- Income tax and National Insurance contributions are due on the value.
- The employer must report this through the payroll or on a P11D form.
There is a trivial benefits exemption that allows employers to give gifts worth up to £50 per occasion without tax consequences. However, cash or cash vouchers (including gift cards that can be exchanged for cash) generally don’t qualify for this exemption. The rules are strict:
- The gift must not be cash or a cash voucher.
- It must not be a reward for performance or part of the employment contract.
- The £50 limit applies per occasion.
Many employers mistakenly think gift cards fall under the trivial benefits rule. HMRC has clarified that most gift cards are treated as cash equivalents and are therefore taxable.
For Personal Use
If you buy gift cards for yourself or as personal gifts, there’s no tax to worry about. You’re spending your own after-tax money, so there’s no additional tax liability.
If you sell gift cards for a profit (for example, if you buy discounted cards and sell them at face value as a business), HMRC may consider this trading income. You’d need to declare it on your tax return if it exceeds the trading allowance.
Gift Cards as Gifts
If someone gives you a gift card as a personal gift, it’s not taxable. Gift cards given as personal presents between friends or family members have no tax implications.
Frequently Asked Questions
Can I use a gift card at any branch of a retailer?
Usually yes, but check the terms. Some gift cards are limited to specific locations or exclude concessions within department stores.
What happens if a retailer goes into administration?
You become an unsecured creditor. In practice, you’re unlikely to get your money back. This is why it’s best not to store large amounts on gift cards and to use them promptly.
Can I top up a gift card?
Some retailers allow you to add more money to an existing gift card. Others don’t. Check with the retailer.
Do gift cards work online?
Many do, but not all. Check whether the gift card can be used for online purchases before you buy. Some require you to register the card first.
Can I exchange a gift card for cash?
Generally no, unless you sell it through a platform like Cardyard or Zeek. The retailer won’t exchange it for cash.
What if I lose my gift card?
If you registered it, contact the retailer. If you kept the receipt, some retailers will replace it. Without registration or proof of purchase, the money is likely lost.
Summary
Gift cards can save you money if you use them smartly. Buy discounted cards for shops you already visit, sell ones you won’t use, protect your balances, and always check expiry dates. If you’re an employer, be aware of the HMRC rules before handing out gift cards as rewards.