Your rights when retailers go bust


John Giles/PA

Retail closures: bad news for employees, high streets and of course shoppers, who can be left high and dry with faulty products, outstanding orders or valid gift vouchers.

Now budget fashion chain Peacocks joins Blacks, La Senza, Hawkin's Bazaar, Past Times and Barratts to become the latest casualty of financial strife. So what rights do customers have when retailer goes into administration?

Shopper concerns
When a retailer goes bust, the main issues for customers are if you have ordered and paid for something in advance, such as furniture; have something you want to return; or hold a gift voucher or credit note for the store.

If you are awaiting delivery of an item you have paid for, contact the retailer to find out what stage your order is at. If your order is ready for dispatch: this means processed, packed and addressed, you own it by right and can usually expect for it to be delivered.

In some cases, if the store is unable to deliver the item, you may be able to collect it from a warehouse yourself. You will need proof that the goods are yours, so take along any receipts or confirmation emails.

If the item isn't ready, you will have to contact the company's administrator and get in line with the many other customers to file a claim for a refund. The administrator is the company handling the bankruptcy and the details should be available on the retailer's website. You may have a long wait for your money back, but you could have some additional rights depending on how you paid.

Paid by credit card
If you paid for items you have not received in full or part by credit, you should be able to claim your cash back in full from your credit card provider under Section 75 of the Consumer Credit Act. This applies for purchases between £100 and £30,000, so if your purchase is less than £100 you will have to contact the administrator for a refund.

Often card providers will require proof that the retailer has gone into administration, so it is worth registering your claim with the administrator whether you have Section 75 protection or not.

Paid by debit card
Debit cards do not have the same protection as credit cards under the Consumer Credit Act.
However, if you paid by a Visa or Mastercard debit card, you may have some protection under the ChargeBack scheme. If your bank is signed up the one of these voluntary schemes you may be able to get your money back and there is no £100 minimum cover. American Express charge cards offer a similar system.

Some banks may dispute Chargeback so go to payment provider service direct first to check your rights.

Paid by cash
Unfortunately if you paid by cash or cheque for your goods there is no guarantee that you will get your money back. All you can do is file your claim with the administrator and wait to see if you are in line for a payout.

Returning faulty goods
If you have a faulty product purchased from a company that has gone into administration, you face the same challenges in getting your money back, and a repair or replacement is highly unlikely.

Visiting the store where you bought the item is worth a try, but is unlikely that staff will be able to help as shops tend to be open solely to sell off existing stock.

You will need to register your refund claim with the administrator and take the aforementioned steps depending on how you paid.

Vouchers and credit notes
Retailers that have gone into administration are often open until stock is sold off, so vouchers and credit notes should be able to be spent as usual. Remember that stock won't be replenished, so act quickly to use your voucher to ensure you're not left with the final junk right before closure.

If you don't manage to spend your voucher before the retailer closes its stores for good, you become a creditor like other customers out of pocket and will need to file a claim in the same way.

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