Sunday, January 20, 2013

Deadweights, Gifts & Ocean Spirits

In the wake of Christmas (Boxing Day) came a report on unwanted Christmas gifts being flogged on the internet. This report referenced Gumtree which is apparently a classifieds website:
"It's so much money that people spend with the best intentions for buying gifts, and unfortunately not all of those gifts find a loving home," he told AAP.
"So we're seeing increasingly people are choosing to sell those gifts rather than hiding them in a cupboard and gathering dust."
In the second year of Gumtree's annual Christmas survey, Mr Thomas said one million more people will head online this year to sell items via classifieds websites.
Now, one could dismiss this given the PR source however there is widely recognised academic research to back up the massive waste of unwanted Christmas gifts: The Deadweight Loss of Christmas

Simplistically, the deadweight loss here is what what you would have done with the money yourself if you had not been indulged with a gift you didn't want or need! Mind you, the internet now offers an easy channel to relieve oneself of such unwanted paraphenalia!

Nor surprisingly all research is that the likely value of your gift will deteriorate with your relational distance. Parents gifts are most likely to be most valued by children. Uncles and Aunts less so. Anyone more distant than that should just give up!

Cash and gift cards are always an option. Although it's best not to delay on gift cards. Many given an Angus & Robertson gift card for Christmas 2010 got a nasty shock in the new year when they were subsequently placed in receivership and the value of the gift cards cut in half. Anyone wanting to hang out for full value was invited to line up with the unsecured creditors!

Which is interesting given that the day after Boxing Day the Cairns Post carried a story on the recovery in the business of Ocean Spirits Cruises. This business was sold in late 2011 with locals cards for unlimited pre-payed reef trips cancelled half a year before expiry.

Loose change has posted previously on this and as a cardholder raised a complaint with Qld Fair Trading. The complaint was against Macro Corporation as vendor of the business to the current operator. This seemed to be going somewhere early last year but then subsequently went nowhere.

It seems legally that Fair Trading can only act if there is evidence that there was no intention to honour the cards at the time they were flogged to punters. Advice was given that an individual may be able to seek redress via QCAT.

Individual actions on items such as reneged gift cards are unlikely to be worthwhile for an individual in terms of time and costs for any funds recovered. This is very clearly a flaw in current consumer law. Any business can really can just get away with  impunity on this one with minimal chance of prosecution or being forced to pay out to all cardholders.

Note: Macro is ASX listed and the controlling Asian interests have done rather well after running off with the cardholders cash to invest in some rather speculative Indonesian coal exploration pasture. However Macro currently remains suspended from ASX trading.

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