Vouchers are the easy Christmas present for the person who is impossible to buy for, and as we go into the New Year, thousands of people will be in possession of at least one. Yet even though people spend millions of euro every year on vouchers for everything from flights to flying lessons, contributing significantly to the retail economy in the process, there is almost no legal protection to ensure they get their money's worth should something go wrong.

More than a third of people gave vouchers as gifts this Christmas, according to a National Consumer Agency survey. If you were one of those on the receiving end, the message is very simple: spend it as soon as you can or risk losing out on the value of your gift entirely.

"The first thing to do if you get a gift voucher," according to Maria Hurley, director of research at the National Consumer Agency, "is check if it says on the face of the gift voucher or the attached documentation what the expiry date is. If there isn't an expiry date marked on the gift voucher, that does not necessarily mean that the shop does not have a policy, so it is worth either going online or getting in touch to find out if they do because people can get caught out thinking that if there is no date on the voucher and that they can use it whenever they like."

The NCA carries a list of retailers and their voucher expiry dates on its website, www.consumerconnect.ie. Expiry dates can give a false sense of security, however, because the real problem with vouchers is that they are completely unregulated: retailers set their own terms and conditions and if they go belly-up, you go right to the back of the queue with little prospect of retrieving your cash.

"It really doesn't matter how good or extensive the expiry date may be. If the business folds, you are on very thin ice because you become an unsecured creditor. If a retailer goes out of business, more often than not it is because of cash flow problems so the last person who is going to get any money from a liquidation is an unsecured creditor. The sooner you use it, the sooner you have the value of the voucher rather than risking losing it if the business folds," said Hurley.

Some retailers who count on the Christmas bump to see them through the first couple of months of the year are now struggling to cope with the fall-off in sales brought about by the hostile weather. Don't be comforted by the fact that your voucher is for a major retailer either; just ask customers who lost out when Zavvi and Hughes & Hughes went into examinership.

Consumers can also be on the receiving end of some sharp practice when it comes to vouchers. Unscrupulous retailers, some very high-profile, have been known to refuse to honour the remaining value of a voucher – either through more vouchers or cash – when it has been partially encashed.

It is also worth noting that there have been instances where multi-store gift cards have come with a monthly charge after a certain period, which eats into the value of your voucher. It is worth checking to make sure you are not caught out in this way. You also need to mind the voucher as if it were cash because, if you lose it, you have almost no chance of being issued with another one.

Dermot Jewell, chief executive of the Consumers Association of Ireland, said it is time something is done to regulate vouchers to protect shoppers.

"Last year in the US, President Obama introduced legislation that gave a five-year term to all vouchers and a variety of other protection measures and we would be hoping that we could adopt something similar here. We acknowledge that five years would probably give rise to complete and utter consternation across the retail sector but we have to start somewhere. Consumers pay across significant amounts of cash without any protection whatsoever regarding how it can be used, when it can be used and what happens in the event of the closure of a retailer who has taken that money," he said.

No sale on statutory rights - A guide to your entitlements when returning goods

At this time of year you will often see signs in shops declaring that no returns will be accepted on sale items. This is only partly true: no-one can encroach on your statutory rights, whether you paid €1 or €100 for an item.

Under consumer law, when you purchase an item, you effectively enter into a contract with the retailer where they agree to sell you, at an agreed price, something which is of "merchantable quality", fit for the purpose it was bought for, and as described. If you take the item home and it fails to meet any of these criteria – it is not working or it's damaged or soiled in a way not made clear at the time of purchase – then you are entitled to return the item. The retailer can either repair the fault, replace the item with another one of a similar quality and price (there should be no charge if it is more expensive than the original), or offer a refund. You do not have to take a credit voucher in lieu of cash in this case.

However, if you are returning the item because it does not fit, you no longer like it or you simply don't want it any more, retailers are within their rights to refuse. This is a matter of goodwill, hence the "no returns accepted on sale items" signs.