Adidas deactivated gift card despite 10 year validity

flaneurs_lobster

There is nothing unusual about bearer bonds which can be contracts for thousands of pounds.

Bit harder to spend at Adidas (or Sainsburys) than a gift card.

Are they not quite rare now? Didn't think anyone issued them anymore.

LightFlare

OP said they used the card In April 2024 and spent £20

That would discount the card from being a full blown fake but could still mean a £20 card was disguised as a £150 one I guess

I’m still not convinced the 10year reference has much merit since it clearly states “valid for 10 years unless used” - it was used

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/82177340#Comment_82177340

Do you understand the concept of (accrual) accounting?

Day one, they sell you a £20 gift card… there is a cost of sale that has to be acknowledged (the cost of the card itself, the time of the member of staff that served you, their managers time in training them etc etc) but on your balance sheet you have £20 of cash as an asset but also £20 IOU to the customer so its neutral from a balance sheet perspective and a small loss in the P&L

In principle that could sit there forever and every shop that operates a giftcard scheme would have an ever growing liability sitting on their balance sheet and never have any recognised revenue from the transaction. This where accounting standard then kick in

For largest companies they are likely to operate under IFRS and so would need to follow IFRS15 for revenue recognition. Unlike the standard it replaced its fairly prescriptive whereas IAS18 gave much more latitude. Its mainly to stop companies saying they have made a near £20 of revenue on the day they sell the giftcard but also prevents them from fudging revenue recognition to smooth profits. Like much of IFRS it is onerous, requires you to have a lot of data and auditors pour over it to ensure you recognition model is accurate.

Companies not listed on the London Stock Exchange (or other exchanges with similar rules) can use GAAP accounting instead its not as prescriptive as IFRS but since Jan this year has now introduced a stricter five step model like IFRS. A GAAP accounting company however can significantly simplify their lives by saying their giftcards have a 2 year expiry date and simply recognising revenue on expiry. Saves them having to collect data, model the data, mantain and review it, argue with auditors is the revenue release curve is appropriate or not etc etc

Amusingly, to me, they call it breakage, its the mirror of stock breakage as listed shops also have to model for what percentage of stock they buy will be broken before sale but in this case its to their benefit as breakage of the giftcard releases revenue.

brocq_18

https://forums.moneysavingexpert.com/discussion/comment/82176088#Comment_82176088

Adidas have confirmed in writing that the card is valid until December 2027. They have also confirmed it was purchased in April 2023, hence deactivated in April 2026.

brocq_18

https://forums.moneysavingexpert.com/discussion/comment/82176957#Comment_82176957

Exactly, Adidas have confirmed in writing that the card is valid until December 2027. But they have also confirmed it was purchased in April 2023, hence deactivated in April 2026.

Okell

https://forums.moneysavingexpert.com/discussion/comment/82181610#Comment_82181610

So in your conversations with them have you asked them if there is a difference between "expired" and "deactivated"?

Have you asked them to explain why, if they have confirmed the card was bought from them, that it misleadingly says on the rcard itself that it will expire after ten years if they are telling you that cards are deactivated after 3 years?

How did you acquire it from the running club? Was it some sort of prize or did you buy it or was it some sort of membership freebie or what?

flaneurs_lobster

So in your conversations with them have you asked them if there is a difference between "expired" and "deactivated"?

Needs to be confirmed with Adidas of course but I wonder if this particular batch of cards were produced in 2017 hence the 10 year 'activation' would end in December 2027. Then subsequently loaded with 'normal' 3 year 'expiring' card data?

Jumblebumble

https://forums.moneysavingexpert.com/discussion/comment/82177887#Comment_82177887

Of course there is the other side of the coin that of inflation

If the £20.00 of someone else's money is compound invested for 10 years and becomes say £30.00 but on redemption it only pays for £20 worth of goods the business is quids in.

American Express travellers cheques are redeemable for ever

https://www.americanexpress.com/us/travel/travelers-cheques/

My mum found some hoarded away from the 70s and redeemed them not so long ago

Good thing they were in Swiss Franks that had been somewhere 10 to the pound when purchased

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/82182788#Comment_82182788

Thats interest not inflation, inflation impacts both side of the coin so is neutral.

Travellers cheques at one point gave AmEx $25bn of money to invest a year, with it representing 50% of their profit at one point. I would argue they are a different beast being typically much higher value and being issued by an FS company that has a host of complex reporting to do already and typically were held longer than gift cards.

Sales of giftcards are tiny by comparison, Adidas' full revenue is below AmEx's travellers cheques only. Their accounts currently have a total of €113m of deferred income for all time sitting there and only part of that is going to be giftcards

Yes they could allow them to be indefinite but it makes more effort to do so and clearly they have decided its easier to cut things off than having to argue with auditors on what the probability of a 30 year old gift card being reclaimed.