Park Christmas Savings Club - is it just a big rip-off?

[FatherJackHackettsUnderpantsHamper]

Now that Christmas 2023 is over, there are loads of adverts on TV for Park, which supposedly helps you to save to pay for Christmas 2024.

However, their main advertised 'benefit' is that you save a certain amount each month and then get it back in time for Christmas in vouchers.

No mention of them paying any interest on the money you're lending them for up to 12 months; and they also obviously massively limit the buying ability of all the money you save - so not only can you not buy any goods that are only available from places that don't accept the vouchers, but you also can't shop around if 'non-voucher' places have the same goods but at cheaper prices. And are the vouchers widely accepted, or are they just for buying from their own catalogue?

What is the actual point in this company? I get that many people - especially those on low incomes - really appreciate the structured discipline and find the regular commitment to saving helpful, but why does it have to be returned in vouchers? Why not just a 'save money, get your money paid back into your bank account/withdraw it in cash in December' scheme - even if they didn't pay any interest in order to pay for/make a profit for running the scheme?

Am I missing something here? What is the benefit of this? And are there now protections in place so that poor folk can't lose all of their savings in another Farepak-type scandal? Why do people bother with this - and effectively reduce the spending power of their limited Christmas budgets even further?

As I said, they could make it a no (or low) interest-paying savings account, and make their money that way - as seems to be the case with the Yorkshire Building Society account that PP referred to.

Just save it yourself and get the interest. You have the flexibility of access to it if you really needed it and you can spend it exactly how you want.

If you really can't trust yourself with having access then maybe.

I'm not being 'faux-confused' at all. Nor am I meaning to get at the people who use it - I do fully know that, when you're very hard up, it's so easy to need to buy food in March and so prioritise your available money for that rather than thinking about Christmas presents in nine months' time. The aspect of locking away your money until Christmas makes perfect sense.

My main point is questioning the ethics of the companies who offer these schemes.

That said, if you can get Amazon vouchers, I suppose that answers the issues I wondered about concerning potentially limited choice of goods and/or being forced to use high-priced retailers.

I love park, have done it for years. I get Amazon and sainsburys vouchers mostly. I love the Christmas food shop, the only one of the year we do in sainsburys rather than lidl/Aldi and buy whatever we want.

Yes, I could save it elsewhere for a couple of quid interest but I like the vouchers

I used to do these years ago when money was tight. It was grand, I couldn't dip in to it as I could with a savings account, and come Christmas I'd get about £500. I used to save with a lady at work, I'd give her the cash on payday.
I'm not in that tight financial position any more, but when I was they were a god send.

Check if your employer has a workplace savings scheme.

Ours does and I use it to save for Christmas as the money comes directly off my salary and straight into the savings account so I never get to see it in the first place, it’s great.

But they are not a bank or building society, they are a voucher savings scheme. Just use it or don't it's as simple as that.

Your local credit union likely does a Christmas saver. You can only withdraw the savings in November or December. And, with the interest rates reasonably high at the moment, you get a few quid extra at the end too.
I started saving with a credit union when I was really struggling financially. Twenty years on, and significantly better off, I still save with them as I really value the ethics of credit unions and their interest rates are very good too.

it's so easy to need to buy food in March and so prioritise your available money for that rather than thinking about Christmas presents in nine months' time. The aspect of locking away your money until Christmas makes perfect sense. I wouldn't say it does, no. It's a lot better for that money to be available to you in March so that you can meet basic living needs like food, rather than hide it away for extras like presents in December.

I use Park, have for years. You can choose which vouchers you want to receive when you order, and can change that through the year if you want. I find it a great way to ring fence Christmas cash, and to get vouchers for specific places so that I make sure it's used for Christmas. No interest on it, easy monthly DD. Can't see me stopping to be honest.

Yet another thing I've learned today; I honestly thought they went bust years ago

The downside is you save £500 you receive £500 rather than using a 12 month savings account and saving £500 and receiving £525.
You can then spend that £525 at Amazon or wherever you wish.

If you are the sort of person who is good at budgeting, putting money to one side, in a separate account or whatever yes it's a rip off. Yes they have your money to do with as they please for 10 months and then will get a discount on the vouchers they buy in bulk. It is also risky - these "savings schemes" are not underwritten in the same way as banks are, when a similar company called Farepak Hampers went bust about 10 years ago, lots of people lost all their money.

But if you are scraping by week to week, I can see the appeal of it all. Personally, if I were worried about spreading the cost of christmas over the year I'd be looking at something like the Asda savings scheme, or the similar ones at other supermarkets. Or an account like Monzo where you can have separate "pots" for things.

I remember another one of the schemes collapsing one year, and it caused chaos. Best put the money into a savings account.

I also don't think there is anything ethically "wrong" with offering this sort of service. There is clearly a market for it.

Everyone's normal is different. Why be so derisive just because you don't do it?

Yes. All businesses have to make money. Even a bank doesn't pay you as much money on your interest as it earns on it - otherwise it would go bust.

Because the schemes aren't backed by FSCS. The CPA is a nice enough gentleman's agreement but doesn't actually guarantee your cash.

Because it's not money in-money out like a bank, you get it back in vouchers and stuff. It restricts where you can shop. People have mentioned getting Amazon vouchers, but there's nothing actually stopping them from pulling the plug on Amazon vouchers if it becomes unprofitable for the company. You might have saved money for Christmas but you might end up spending more because of the restrictions on where you can spend.

They have massive cancellation charges in terms of %. If you're poor enough to want to use them then there's a fairly decent chance you'll want to dip into the money at the end for things that are wants rather than needs. That hoarding is exploitative when you juxtapose it against the shiny sparkly adverts of happy people popping champagne.

The hampers are piss poor quality for the cost of them

After the Farepak scandal, legislation was brought in to ring fence this type of fund, so in theory it should be safe.
Fairly sure this isn’t true. According to MSE there is now a voluntary code of conduct, that’s all.

https://www.gov.uk/government/news/new-rules-to-protect-consumers-hard-earned-cash

I use Park.
If I have money in my savings account, it gets used for other things throughout the year, because life is like that and shit happens like the fridge breaks or whatever.
I can't dip into Park savings.
It's guaranteed money for Christmas. Last year I lost my job in November and still had a great Christmas because I'd got Park vouchers.
I like it.
If I had more money coming in, I could manage it better. I don't, so Park savings it is.

If you can trust yourself not to dip into savings

If you can access quality banking with today's (unusually for recent years!) high interest rates

Then you are better off putting the money into a savings account with a good interest rate... But only very slightly! If you put £40 a month into a 5% account, every month, for 12 months, you'd only earn £13 in interest by the end of the year. So it's not exactly a massive difference.

Hence the appeal of these schemes. The fact that you can get Amazon vouchers makes them much less scammy, to me. In the past, some such schemes forced savers to spend their vouchers in places that aren't necessarily the cheapest.

I used park when DD17 was younger and money was tighter. I saved each month for love 2 shop vouchers and got her many 3 for 2 toys for Christmas.
We no longer have a need for park and I wish 3 for 2 Argos toys were still on the Christmas list! I do still however save with them still and treat myself every year 😊

The park vouchers have been life changing for me.

Every pay day money is withdrawn from my account before I even notice.

I never have to stress about money at Christmas time because I know I have the money in vouchers to buy all of the Christmas food and presents.

I usually have enough left to but my DCs birthday presents later on in the year too.

Its definitely better if you can save a bit each month yourself but when you don’t have much money to begin with, then it’s too easy to dip into your savings.

I have used park for years. I don’t class myself as poor or in poverty 🙄
I like knowing it’s money I can not touch throughout the year. I can’t guarantee if I saved it in a bank. I wouldn’t use it. I’m not the best at saving. I also love the vouchers, there’s a large variety now and I do get some on a prepaid card which you have to pay 10% for but I don’t mind.
If I were to save money, once I withdrew it in November it probably wouldn’t all get spent on Xmas, whereas the vouchers are special for Xmas. Feels like a real treat when they come through the door.
I have ds’s birthday at Xmas too so I usually save between £800-1000 that covers Xmas, birthday and food shopping.