The U.K. gift market is worth over £5 billion a year and shows no signs of slowing down, with 20,000 gift cards purchased every hour. But if a business goes into administration, those cards can become worthless to the receiver. Now a new company — LoveFromMe — has launched to save gift card consumers from retailer insolvency.
LoveFromMe is a personalized gift card scheme which can be redeemed to spend online and in-store at over 30 million locations around the world that accept MasterCard. Since the cards are not backed by a specific retailer, there is no risk to the consumer when buying and gifting these cards.
According to a press release, if a retailer goes into administration, the administrator may continue to accept gift vouchers at their face value if they choose to. But if that retailer closes down entirely and goes into liquidation, the cards are essentially deemed worthless. This was the case when electrical chain Comet closed down in 2012, leaving unused gift vouchers worth £4.7 million still in circulation.
“Consumers who have gift cards are classed as unsecured creditors and frequently receive nothing. Recent high profile retailer insolvencies – think Borders, BHS, Austin Reed and others – have highlighted the lack of legal protection for consumers buying gift vouchers,” says Thish De Zoysa, co-founder and director of LoveFromMe.
LoveFromMe offers gift cards for both personal and corporate gifting. It achieved revenues of £1.175m in 2016, with corporate clients including Goodyear, Travelodge and T.M. Lewin. A £350,000 equity crowdfunding round has been launched on Seedrs.