Employers love them, employees don’t: A guide to vouchers
The New Year 5771 is upon us and while some employers choose to give their employees gifts of wine and chocolates, others opt for envelopes with gift vouchers, to let the workers get what they want. A survey TheMarker commissioned from the market research firm Panels found that 26% of workers received gift certificates worth between NIS 100 to NIS 250 for Rosh Hashana, 49% received gift certificates worth between NIS 300 to NIS 500, and 25% received vouchers worth NIS 500 or more.
Most employers give their workers Tav Hazahav gift certificates issued by the Super-Sol retail chain, or Rav-Tav issued by rival retail giant Blue Square. The survey found that most recipients use the vouchers to buy food. Only 26% use them on clothing and shoes, while a mere 12% use them to buy holiday presents.
But are the employees happy? They are not. A significant majority of the survey respondents, 73%, said they’d rather receive the same amount in cash, not in vouchers.
One reason probably is that the vouchers can be used only at certain chain stores, which are listed on the back of the certificates. Moreover, not all the stores grant the full value listed on the voucher. Just as annoying is the retailers’ habit of refusing to give change if the voucher’s full value isn’t used: they give change in the form of vouchers or − worst of all − store credit, which can be used only at that store.
Another problem is that the vouchers have an expiration date. Use it by the deadline or lose it. However, the retailers say that only a small fraction of people completely neglect to use their gift certificates.
The logic behind the restrictions is clear. The employers buy the vouchers at a discount, as high as 19%. Say the voucher is for NIS 100: The cost to the employer is NIS 81. Logic suggests that the various restrictions on the vouchers are a way for the retailers to make up their lost income.
In any case, clearly there are issues, and even the legislator found it necessary to get involved. MK Danny Danon of Likud submitted a bill in May to force businesses to treat such gift vouchers as cash equivalents. In the explanation for his bill, Danon wrote that the business sector takes unfair advantage of the limited choice of venues available to consumers, “due to the fact that the gift certificates are restricted to a limited number of businesses.” If consumers want to use their vouchers, they have no choice but to accept unfavorable terms, he wrote.
The voucher closest to being equivalent to cash is the Isracard gift certificate. The employer buys it at close to its face value, without a substantial discount. The consumer, for his part, has a much wider choice of venues at which to spend the gift.
Tips on using vouchers
The restrictions on using the vouchers lead a not-small number of people simply to hawk the things. A glance at the Yad2 classifieds website will find a range of offers, in which people try to sell the certificates they received from their employers, usually for around 15% less than the face value.
“Elran” from Jerusalem, for instance, was offering NIS 3,000 in Tavei Yisrael vouchers for NIS 2,500. He says he gets vouchers twice a year, at Rosh Hashana and on Passover. Some he keeps and uses, some he sells, depending on his financial situation at the time. Like many people, he’s motivated to dump the things because it isn’t convenient for him to get to the supermarket chains where they are accepted.
Ultimately, these vouchers are worth money and should be used wisely. Here are a few tips you should know before setting out to shop.
• At the discount retail chains, you’ll probably get only 90% of the value stated on the voucher. You’re better off checking that in advance and using the certificates at stores that honor the value in full.
• Stores accepting the vouchers will not let you also take advantage of special sales or member discounts. For instance, say members of the customer club can buy two chickens for the price of one. If you pay by voucher, even if you belong to the club, you’d have to settle for a single fowl or pay for both. Do the math to figure out which pays off more: to pay cash for the special deal, or to pay with voucher and forgo the deal.
• When buying costly items, you usually can use vouchers only up to a certain sum. Even if you have, say, NIS 1,000 in vouchers, the store may allow you to pay up to only (for instance) NIS 500 using them, and will demand cash for the rest. This often applies to home electronics such as televisions or furniture.
• If you bought somebody a present using vouchers, you may cause them mortification when they go to exchange the beast. Chains tend to note on the exchange slip that the item was bought using vouchers and when the recipient comes to switch it for something he actually likes, the same restrictions that applied to the voucher will apply to him.
• You should know that if the restriction isn’t written on the voucher, it doesn’t exist, no matter what the store says. Under the Consumer Protection Law, all restrictions must be written on the voucher next to the store’s name or logo. Regarding magnetic vouchers, restrictions will appear in the appended document. You’d better keep it with you when shopping.
• The expiry date isn’t always the last word. Some chains will allow you to extend the voucher’s duration, through the head office. If the voucher is magnetic, extending its duration is simply done by computer.
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