As two retailers face financial trouble, here's what it means for gift card holders
Anyone in possession of a gift card or vouchers from Austin Reed or BHS should spend it “as soon as possible”, according to one consumer group.
BHS is set to file for administration today (Monday) in a move that could threaten up to 11,000 jobs.
It comes just days after menswear chain Austin Reed announced notice of its intention to appoint administrators.
While it’s obviously a big blow for all those who work at these stores, it could also spell trouble for any shoppers who still have gift cards with these chains.
While nothing has been confirmed in the case of either retailer, we’ve seen in previous instances that shops have stopped accepting these gift cards and vouchers either for good or at least during the early stages of administration.
Speaking specifically about the BHS case, Which? campaigns director Alex Neill said: “Our advice to anyone with a voucher is to spend it as quickly as possible.”
Compare credit cards - 0% interest for up to 40 months
What are your rights?
When a store enters administration it may refuse to accept gift vouchers or cards.
“If they do refuse and you need to make a claim, write to the administrators with proof of your vouchers.” suggests Which?
“Unfortunately there is no guarantee that you will get the full value back, and a claim could take some time for the administrators to process.”
If a retailer does refuse, don’t simply assume this is the end of it – as we mentioned before any refusal could just be temporary.
If the gift card cost more than £100 and was paid for with a credit card, you could be protected under Section 75 of the Consumer Credit Act.
The act states that a credit card firm is jointly liable should something go wrong, and they may decide to reimburse you. Unfortunately, this protection isn’t definite as each administration is different, so it’s unclear as to whether this law will apply.
Compare credit cards - 0% interest for up to 40 months
Avoid hassle in the future
If you’re thinking of buying gift vouchers and cards for someone else, take the time to research the financial security of the retailer first.
Check online will to find out how a company is faring. Any recent talk of profit warnings or debt refinancing should serve as potential warning signs.
Another way to avoid the risk of losing out when a company goes bust is to buy a multi-store gift card.
Or you could simply give someone cash as a present. That’s valid anywhere – and it won’t expire in 12 months like most gifts cards!
Read more on loveMONEY:
Gift cards you can spend in more than one place