Western Daily Press (Saturday)
What you need to know when a firm goes bust...
One of my favourite things about being a roving consumer rights expert is I get to travel all over the UK for various films and reports.
Getting to meet people from every part of Britain is vital for my job – and it’s no hardship (I love it).
I get to be a tourist too when
I’ve finished work. You’ll find me troubling museums and local restaurants and dragging reluctant crew members on walking tours.
I also get a feel for the state of the nation as I explore. And there’s no greater indicator of that than our high streets.
Last year, more than 17,500 chain store outlets closed their doors. Around the UK, too many businesses are boarded up and councils are having to reimagine the high street for future generations.
I believe it’s really important that we support the businesses and brands we love. But it makes sense to be prepared should a shop go bust.
Here’s what to watch out for if you’re worried about your rights.
When firms go under
Officially, when a firm goes bust, you join the long list of creditors who are owed money.
In reality, you are at the back of the queue. It’s very rare to actually get any cash back.
So, for most people, when a firm goes into liquidation any cash you’ve paid along with vouchers and gift cards vanishes – even if you’ve not had the goods.
However, the process of a firm going into administration isn’t usually instantaneous.
There’s usually a window of opportunity where you can quickly spend the voucher or recall card payments before the firm goes under. There’s no way to definitively prepare for this. You just have to keep an eye on the news and remember what vouchers and store credit you have.
Sometimes the administrators of the company will allow you to spend the voucher or card – or may even honour them. But the rule of thumb is this – if you hear a firm is going under, spend the voucher.
Vouchers
Vouchers can be bought as gifts or issued in lieu of a refund. In fact huge numbers of people hold vouchers for goods or services that couldn’t take place over the pandemic, from flights to festivals.
Vouchers usually have an expiry date printed on them and you must ‘use it or lose it’ by this date.
Many vouchers meet this fate languishing in wallets and purses across the land.
This is why businesses like them – people forget to cash them in.
If you have a voucher, put a reminder note in your calendar at least a month before the expiry
date so you don’t lose out.
Gift cards
Gift cards work in a similar way to vouchers and are almost exclusively purchased as gifts. Again, they should have clear expiry dates on them, though there have been disputes in the past about these rubbing off or not being very clear.
If you’re making a complaint about a gift card, the purchaser usually has to make the complaint.
When a firm gets taken over
In the past there was a general assumption that when a business was purchased or rescued by another party after verging on bankruptcy, gift cards and vouchers would be honoured if the firm continued to trade.
That became a little complicated in recent years. Some new owners suggested new vouchers would be issued, but I’ve seen hundreds of complaints about this.
Don’t assume that your vouchers will carry over under new management.
One last tip
If you have vouchers or shop credit spend it as soon as you can.
And if you hear a firm might go under, ask your bank if they can ‘charge back’ any cash you’ve spent. The quicker you act, the more likely it is you’ll get your cash.
Resolver can help you sort out complaints. Go to resolver.co.uk