When you buy someone a gift card, you expect the value you've paid for to be there when they're ready to spend it.
Recent Australian retail closures and administrations have highlighted an important consideration when choosing a gift card: what happens to the balance if the retailer gets into financial difficulty?
It depends on the retailer and what the administrators decide, but typically a few things can happen:
- Gift cards may no longer be accepted if a retailer becomes insolvent.
- Redemption conditions may change, such as requiring additional spend.
- Gift card holders can become unsecured creditors if the retailer enters liquidation.
- Any remaining balance may be partially or completely lost.
What happens to gift cards when a company goes into administration in Australia?
If a company goes into administration in Australia, its gift cards may still be accepted, have new conditions placed on their use or stop being accepted altogether. What happens depends on the retailer's circumstances and decisions made during the administration process.
If the company is liquidated, gift card holders may become unsecured creditors. This means they can claim the unused value of their card but generally rank behind secured and priority creditors, so there is no guarantee they will recover some or all of their balance.1
Recent retail collapses show how this can play out in practice. When Barbeques Galore entered voluntary administration and receivership in February 2026, customers could continue using gift cards, but only if they spent an additional $2 for every $1 redeemed. When the company later announced the closure of its company-owned stores, gift cards continued to be honoured under these conditions until 30 June 2026, after which unredeemed gift cards would be treated as unsecured creditor claims.2
Are retailer gift cards safe?
Retailer gift cards can be a convenient way to give a gift, however their value is generally tied to that retailer or retail group, which creates a limitation if the business stops trading or changes the way gift cards can be redeemed.
It's important to distinguish this retailer exposure from everyday card security.
Protections against theft, loss or fraudulent use vary between gift card providers, with different terms applying if a card is lost, stolen or compromised.
Retailer exposure is different. The ability to use the balance ultimately depends on the retailer continuing to trade and accept the card. If it enters administration or liquidation, redemption conditions may change or the remaining balance may not be fully recoverable.
How is a Mastercard or eftpos Gift Card different from a store card?
A prepaid gift card is loaded with a set value in advance, but unlike a retailer-specific gift card, it isn't restricted to one store or retail group.
A Mastercard Gift Card from Gift Card Store can be used wherever eligible Mastercard prepaid cards are accepted, subject to the card's terms and exclusions. An eftpos Gift Card can be used at participating eftpos merchants across Australia, giving recipients the flexibility to choose where they spend their balance.
Specialty Gift Cards offer more targeted choice, with cards designed for particular categories or occasions while still providing access to multiple participating businesses.
Depending on the product, Gift Card Store also offers physical and digital gift card options, making it possible to choose both how the gift is delivered and how much spending flexibility the recipient receives.
Retailer Gift Card vs Mastercard Gift Card: a quick comparison
Here’s how retailer gift cards and Mastercard Gift Cards from Gift Card Store compare at a glance:
| Feature | Retailer Gift Card | Mastercard Gift Card |
|---|---|---|
| Where can it be spent? | Limited to select retailers | 37 million retailers worldwide, in-store or online |
| Tied to one retailer? | Generally yes | No – use anywhere, anytime |
| If a particular retailer closes | Card may be affected | No impact to recipients, they can spend anywhere |
| Physical/digital options | Depends on retailer | Wide range. Choose from Plastic, E-Gift Card (emailed) and Digital Gift Card (SMS delivered) |
| Security features | Varies by retailer, however many providers do not replace lost or stolen cards. | Fraud Protection Guarantee. Lost or stolen cards can be locked and replaced. |
The key difference is flexibility. A Mastercard Gift Card isn't tied to a single retailer, so if your favourite retailer closes, you can spend your balance with another eligible participating merchant.
What should you look for when choosing a gift card?
The right gift card will depend on who you're buying for and how much flexibility you want to give them. Before choosing one, consider:
- Where can it be spent? Does the recipient have one option or a choice of participating retailers?
- What happens if a retailer closes? Consider whether the card's value depends on one business continuing to trade.
- What security features are available? Check what protections apply if the card is lost, stolen or used fraudulently.
- How will they receive it? Depending on the occasion, you may prefer a physical card or the convenience of digital delivery.
For many gift buyers, choosing a card accepted across multiple merchants can provide greater flexibility than one tied to a single retailer.
What is the safest type of gift card to give in Australia?
There isn't one type of gift card that's right for every situation. When comparing options, consider where the card can be used, what protections and security features apply, and whether its value depends on a single retailer.
Choosing a gift card that can be used across multiple participating merchants reduces exposure to that particular retailer-specific risk. If one retailer closes, the recipient can simply choose to spend their balance elsewhere.
Gift Card Store is owned and operated by Corporate Prepaid Cards, with prepaid cards supported by security features designed to protect cardholders against fraud and unauthorised transactions.
Give more choice with Gift Card Store
Gift Card Store offers Mastercard, eftpos and Specialty Gift Cards designed to give recipients greater choice over where and how they spend their gift. With physical and digital options available, you can choose a gift to suit the recipient and the occasion.
Shop prepaid gift cards and give them the freedom to choose something they'll love.
Buying rewards for employees or clients? Explore GCS for Business.
Frequently asked questions
1. What happens to my gift card if a store closes in Australia?
If a store goes into administration, whether you can continue using its gift cards will depend on the circumstances and decisions made during the administration process. If the company operating the business becomes insolvent, gift card holders become unsecured creditors, which means they may recover only some or none of their unused balance.3
2. Can I still use a gift card if a retailer closes their stores?
You may not be able to use a gift card once the issuing company goes into liquidation. Gift card holders may instead need to make a claim as unsecured creditors. Unsecured creditors are paid after secured and priority creditors, so there may not be enough funds available to repay the full unused balance.4 In fact, only about 1 in 20 finalised Australian liquidations from 2021 to 2025 paid unsecured creditors anything, and the typical payment was just 9.8 cents in the dollar.5
3. Visa or Mastercard gift card vs store gift card: what’s the difference?
Visa and Mastercard gift cards can generally be used across a broader network of participating merchants, while store gift cards are usually tied to a particular retailer or retail group. This reduces exposure to a single retailer closing, but doesn't necessarily make the card more secure against loss, theft or fraud. Security features and protections depend on the individual card and provider.
4. Are Mastercard Gift Cards safer than store gift cards?
Mastercard gift cards aren't necessarily safer in every respect, but they can reduce exposure to the risk of being tied to one retailer. If a particular retailer closes, an eligible Mastercard Gift Card can still be used at other participating merchants. Protections against loss, theft and fraud depend on the individual card and provider.
5. Where can I use a Gift Card Store Mastercard Gift Card?
A Gift Card Store Mastercard Gift Card can be used in-store and online wherever eligible Mastercard prepaid cards are accepted, subject to the card's terms and exclusions. Gift Card Store Mastercard Gift Cards can be used at more than 37 million retailers worldwide, providing recipients with a broad choice of places to spend.
References
- Consumer Affairs Victoria – Gift vouchers and gift cards
- ABC News – Barbeques Galore to close 62 stores
- ACCC – Gift cards and discount vouchers
- ACCC – When a business goes bust
- Source URL not included in the supplied document.
