Employees prefer cash to vouchers for Pessah gifts

Israel Consumer Council (ICC) has reported scores of complaints over the vouchers and their various hidden limitations.

March 9, 2010 06:52
3 minute read.
Employees prefer cash to vouchers for Pessah gifts

pessah wine matza 88. (photo credit: )

The old adage says, “Don’t look a gift horse in the mouth,” but as Pessah approaches, many employees are grumbling about the holiday shopping vouchers they receive from their employers.

The Israel Consumer Council (ICC) has reported scores of complaints received from consumers over the vouchers and their various hidden limitations.

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“Most of the complaints were about improper disclosure on the part of the issuers of the voucher, but some were against the behavior of the businesses,” said ICC spokeswoman Rakefet Weintraub on Monday.

According to a recent study compiled by the ICC, roughly half of all adult employees in Israel receive vouchers as gifts from their employers for the High Holy Days. The vouchers themselves cost less than their equivalent in cash, which is why employers buy them. Vouchers redeemable for NIS 1,000 are sold for NIS 875.

The study also showed that 63 percent of employees would rather receive cash of the same value instead of vouchers. The reason is that the limitations placed on the purchasing power of the cards, a limitation that doesn’t exist when dealing with cash, sometimes makes them worth less than what was paid for them.

“Receiving gift vouchers may be nice, but it turns out the vouchers have restrictions that make them less attractive to many consumers,” said Weintraub. “To begin with, unlike in cash, NIS 100 in vouchers is not always worth NIS 100. Some chains honor the voucher at less than its advertised worth. This is particularly true in cases where there are discount chains that may honor a NIS 100 voucher as only 85% or 90% of its worth.”

Other problems reported were that the vouchers were only valid up to a certain date and could not be redeemed afterward; that many stores did not provide change in cash for the vouchers and would only offer store credit; and that they often could not be put toward products that were on sale or discounted. In some cases, stores even refused to honor vouchers because the establishments’ names had changed since the vouchers had been issued.

According to the ICC, Israeli law requires any provisos or limitations to appear clearly on the voucher itself, and failure to do so is an offense. The ICC recommended that people who buy the vouchers look closely at the fine print that appears on it and request to see any accompanying regulations that may contain additional restrictions.

It also urged consumers to call the customer service number on the voucher with any questions or concerns.

Tzvika Levin, CEO of consumer advocacy organization Yachad, Zeh Koach (unity is power), said he needed a magnifying glass to read the fine print on the vouchers.

“Unless the issuers provide a poster-size sheet with all the regulations with every voucher, there is no way the consumers will be aware of all the restrictions,” Levin said, adding that the way the voucher companies treated consumers was “absurd.”

“These vouchers are, in effect, a way for billion-dollar businesses to gain credit at their shoppers’ expense,” he said. “Since the vouchers are already paid for, it’s like you’re giving them a loan – but unlike any other loan, in this case, the lender is in a bind.”

The two major voucher companies are operated by two of the country’s major retail outlet chains, Shufersal and Blue Square Israel.

Levin estimated that the voucher market in Israel was worth hundreds of millions of shekels and that despite a reported reduction in the scope of their use, companies were still earning handsomely off the ignorance of consumers. Like the ICC, he urged the public to examine the vouchers carefully before going shopping.

“It will save you time, money and disappointment,” he said.

Levin added that he was in the process of advancing a Knesset bill to help regulate the gift voucher market and make sure they were honored in full.

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