Andrew Johnson Director General

1. Andrew JohnsonDirector General Conference 2014

2. Feedback from this year • Not enough focus on gift cards • Too prepaid orientated • Not enough content to entice members • Good to see content from prepaid • Cannot justify 2 days away from office • Expensive to attend • Great networking • Confusion that Prepaid Expo Europe incorporated UKGCVA Conference

3. Proposal • Potential for UKGCVA Conference to be standalone event • UKGCVA Conference held in same venue on same day (Prepaid Expo will be 2 days) • UKGCVA will develop own agenda • UKGCVA will sell delegate places to UKGCVA members • Joint evening networking event

4. Self Regulation

5. Background • £4.7bn gift card and voucher sales in 2012 • Big name brands disappearing from the UK High Street • What happens to vouchers and gift cards when retailers enter administration? Gift voucher and gift card holders become unsecured creditors – low down the food chain, little chance of getting money or goods

6. Background • £4.7bn gift card and voucher sales in 2012 • Big name brands disappearing from the UK High Street • What happens to vouchers and gift cards when retailers enter administration? Negative Press Government Intervention

7. Negative Press

8. Government Intervention The Coalition Government has requested a review of gift vouchers by the Department for Business, Innovation and Skills – likely outcome may be dependant on industry ‘self-regulation’ Labour, according to recent press reports want to see a change in the Administration regulation to ensure gift voucher holders are given priority

9. Government Intervention • Department for Business, Innovation & Skills (BIS) • Potential for self-regulation / ‘Code of Conduct’ • Imposed regulation unlikely, but possible • Across the whole industry – from local hair salons to multi-national retailers • Ring-fenced funds • Breakage

10. Latest News from BIS • Junior Minister, Jo Swinson • BIS to host ‘policy workshop’ including vouchers industry, consumer groups and insolvency experts • Possible ‘Ministerial Roundtable’ to formalise results of policy workshop

11. Where we are Meeting of UKGCVA Working Group in May discussed: • Full regulation – all programmes in Emoney • Insurance Underwriting • ABTA style scheme – all issuers of gift cards put % turnover into central fund to ‘bail out’ administrations • Safeguarding Funds – gift card/voucher float dedicated bank account managed by you and a bank • Trust Accounts • Customer charged an optional additional fee to ‘insure’ their card or vouchers against loss – either from customer losing or in the event of issuer administration

12. Where we are Meeting of UKGCVA Working Group in May discussed: • Full regulation – all programmes in Emoney • Insurance Underwriting • ABTA style scheme – all issuers of gift cards put % turnover into central fund to ‘bail out’ administrations • Safeguarding Funds – gift card/voucher float dedicated bank account managed by you and a bank • Trust Accounts • Customer charged an optional additional fee to ‘insure’ their card or vouchers against loss – either from customer losing or in the event of issuer administration These options will incur additional costs or will change business models

13. Agreed Potential for gift card and voucher funds to be set up in such a way that the holders of cards and vouchers become secured creditors in the event of the issuer going into administration. Currently voucher and card holders are unsecured creditors which puts them way down the list if a pay out is made

14. However • This approach has been disputed by some members: • Secured creditors are not guaranteed to be paid out so this may lead to a false sense of security • It is not practical to register each voucher holder; only vouchers as a whole • May impede the Issuer to secure bank credit for general trading • For this to work CEO’s will need to agree and the industry (UKGCVA) will need to investigate further • How effective this will be for small voucher issuers such as hairdressing salons etc • Consequently this was not taken forward to BIS • We do need to respond to BIS

15. Conclusions to date • Some members believe all gift vouchers and gift cards should be subject to Emoney style regulation to ensure level playing field • Closed Loop card and voucher issuers do not necessarily ring fence funds, any changes to this could cause significant internal issues • No consistent view or way forward concluded from members

16. Next Steps • Please discuss with your company • Waiting for dates to meet with BIS and consumer groups • Engaged with BDO to gain advice on how to move forward • Need to represent differing views from the membership, acceptance we may take forward conflicting views

17. Wayne HarringtonEdenred Counterfeit Gift Vouchers & Gift Card Fraud Tony Rich Halfords

18. Gift Vouchers • Increasing number of fraudulent gift vouchers in circulation over the past 2 years • More sophisticated copies • Several UK police forces investigating individual cases

19. Gift Cards • Recent scam affected several retailers – may still be in operation • Cloning cards, gift card is presented at till, loaded by operator before asking for payment. • Payment is eventually not made and till operator cancels card • In the meantime second fraudster has spent the funds on the card in another store, when till operator cancels card the funds have all been spent • Several retailers have evidence but none have reported to police

20. Working Together • How big is the problem? • Should the UKGCVA take these issues to SOCA? • How much data are members prepared to share? • Are there other ‘scams’ to be aware of? • Members use the ‘If anyone has heard of..’ email to alert fellow members • What next?

21. Nothing new to reportMeeting with HM Treasury postponed from April is now on Tuesday 25th June VAT