What rights do UK shoppers have if a store enters administration?

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It’s been a dreadful week for the high street, with Debenhams, Arcadia Group – which includes brands such as Topshop and Wallis – and fashion retailer Bonmarché all going into administration.

Their shops are still open, where lockdown rules permit, and their websites are still trading, so we’ve looked at what rights you have if you buy items from a store that falls into administration.

Can I still shop in a store that has called in the administrators?

Usually, yes. Shops will stay open to sell off as much existing stock as possible, and there may be big discounts as the administrators attempt to clear stores. Retailers’ websites will also continue taking orders until warehouses are empty.

Be aware that if you buy something that later proves faulty, you could have a problem getting your money back. The best way to protect yourself is to avoid paying by cash, cheque or direct transfer, says Martyn James of the complaints website Resolver. “You’ve got no rights to recall your money if this happens … Don’t pay if you can’t afford to lose it.”

Instead, use plastic. On purchases costing more than £100 you will be able to use section 75 to reclaim money owed. On smaller purchases, card providers offer chargeback, which does a similar thing.

James also advises that if you place an order online, you should check that it is right straight away. “I hate to spoil Christmas, but if you have sent something to someone else, you should ask that they open the order and check it’s fit for purpose so you can take up the issue with the retailer,” he says.

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I have a gift card. Can I still use it in the remaining shops?

Yes, you should be able to. Legally, a retailer does not have to honour vouchers or gift cards once in administration, but at the moment they are all still accepting them.

However, Arcadia has been having technical difficulties with its gift cards and vouchers, and shoppers are currently unable to spend them. It has introduced a requirement that they cannot be used for more than 50% of a purchase – so, for example, if you have a £10 voucher, you need to spend at least £20 to redeem it.

Administrators for the other retailers could also introduce new terms and conditions, so it’s wise to spend any outstanding sums sooner rather than later.

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If you do not spend your voucher and a shop closes for good, you become a creditor of the company and need to hope there is enough money for the administrators to meet your claim for a refund. “It’s very rare to actually get any cash back,” says James. “For most people, when a firm goes bust, your vouchers and gift cards become worthless.”

What if I’ve bought something using buy-now-pay-later – will I still have to pay?

Yes. Even if the company the goods came from goes out of business, you have an agreement with the buy-now-pay-later firm and it still exists, so you need to make those payments. Otherwise, you could incur late payment fees, or end up with a debt company trying to recover the money.

If you have sent the items back, notify both the retailer and the buy-now-pay-later firm in writing in case there are problems later on.

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Can I take things back if I change my mind?

Legally, if you buy something in a shop, a retailer does not have to give you a refund simply because you later decided that you do not want it. Often, when retailers are in administration, they will stop taking returns unless an item is faulty or not fit for purpose.

But the rules are different for online shopping, and consumers have to be offered a refund if they want to send things back within 14 days (there are a small number of exceptions to this, including personalised and perishable goods). Even in administration, a retailer will not be able to say that you cannot return items.

However, if you send them back, you may have to join a long list of creditors for your cash, so pay with a credit card or debit card.

What if I place an order that never arrives?

If you paid by card then you may well be able to get your money back.

Under the Consumer Credit Act, a credit card company is “jointly and severally liable” along with the retailer for the quality of the goods or service you purchased, providing you spent between £100 and £30,000. If you did and the company goes bust, you will be able to claim your money back from your credit card provider.

Debit cards are not covered under the Consumer Credit Act, but you may be covered under the chargeback scheme, and should be compensated for any sum of money lost when a company goes under.