Your money-making expert. Financial journalist, TV and radio personality.
It’s a sad story: your favourite shop goes bust, and suddenly you’re left with a gaping hole on your local high street.
Sadly, it’s not unusual for businesses to fail – especially when the pound is an unstable as it is at the moment. So, what are your rights when a shop goes bust? What happens if you’ve bought goods or you have vouchers you were planning to spend there?
Here, we’ll think about what rights you still have if you find yourself in this situation.
You should be covered. According to section 75 of the Consumer Credit Act (1974) your credit card will cover you for any goods with the value of between £100 and £30,000. If you paid a deposit of a nominal amount on your credit card and paid in some other way – cash, for example – you will also be covered.
You may be able to get your money back for goods under £100 via ‘chargeback‘. This is where you get your bank to take the money back from the retailer.
However, you’re not legally obliged to be paid by the card provider. You have 120 days to contact your provider/bank to ask them to get a refund.
If this approach is unsuccessful you have the right to appeal through the Financial Ombudsman Service.
Unfortunately, the chances are that you’ve lost your money. The priority of the liquidators is to pay off secured creditors and all staff, with customers being much further down the chain.
However, if you’ve bought something and your order has been processed and is waiting to be sent out, legally the item is yours and must be delivered. You can find out who the administrators are by searching the Companies House website.
Many products are sold with an automatic manufacturer’s guarantee (or warranty), which usually lasts for a year.
Third parties usually underwrite longer-term guarantees and warranties. This legally requires them to honour your contract, whatever has happened to the retailer who originally sold the item.
Read the warranty carefully if it worries you – this way, you’ll already know the terms and conditions and how long your product is covered for if anything does go wrong.
If the shop has gone into liquidation but continues to trade, then any gift vouchers can still be used.
If the company has ceased trading then it’s highly unlikely that any money can be recouped. However, if the gift card is for more than £100 you can claim the money back if it was bought on a credit card.