BHS and Austin Reed administration: Your consumer rights explained
After nearly 90 years on the high street, BHS yesterday announced it had filed for administration and just 24 hours later, Austin Reed followed suit.
When a retailer goes into administration, it may not always be clear what your consumer rights are.
A message on the BHS site reads: “BHS will continue to trade as normal in store and online during administration. Placing orders online and all parcel deliveries remain unaffected.”
Below we explain exactly what you need to know when it comes to returning items and buying goods once a retailer has filed for administration.
Gift cards and vouchers
When a retailer goes into administration, it’s perfectly within the law for it not to accept gift cards or vouchers.
BHS has stated gift vouchers are still valid but they can only be used for 50% of the value of the purchase. For example, if you have a £10 voucher, this can only be used on an item costing £20.
Gail Cohen, director general of the UK Gift Card and Voucher Association says that if consumers have outstanding gift vouchers with BHS, it is best to spend them as soon as possible following the news of its administration, to ensure that the voucher can still be utilised.
As BHS and Austin Reed are still trading, consumer campaign group Which? says it’s best to shop in-store rather than online as there is a risk the goods may not be delivered, especially if the financial situation worsens.
If at a later stage, gift cards or vouchers aren’t accepted, you need to make a claim in writing to the administrators with proof of your vouchers.
You can usually find the name of the administrator on the website of the retailer that has gone into administration.
However Which? warns there’s no guarantee you’ll get all your money back and it could take up to 12 months for the claim to be processed.
Refunds and warranty
Normally, you have a right to return faulty items, but once a company goes into administration, this right becomes invalid.
If you have been supplied with faulty goods and the company is placed into administration but is still trading, you may be able to get a replacement or a refund in the normal way under the Consumer Rights Act.
If the item came with a warranty you should be able to claim a refund or repair from the manufacturer or if you took out extended warranty from a third party, such as an insurance company, you should be able to claim with it as it shouldn’t be affected by a store closing.
Otherwise, another option is to register the claim with the administrators for the cost of fixing the item, or for a refund if there’s still time to reject the item.
Paid by debit or credit card?
Buy anything on credit card costing between £100 and £30,000, even if you put down much less as a deposit, and the card provider is jointly liable for any breaches of contract.
If items weren’t delivered, you could ask for a refund or you could claim for the cost of a repair if they were faulty.
You’ll need to write to your credit card company with details of your claim.
If you paid by debit card you may be able to claim through the MasterCard and Visa chargeback scheme, as long as it’s within 120 days since paying on your debit card and making your claim.
If you bought gift vouchers on your card, you should be able to put in a chargeback request to your bank on the grounds that the vouchers are fundamentally different to what you paid for.
This is because you expected to be able to exchange the vouchers for goods of a certain value and instead they’re worth less.
BHS store cards
BHS Limited is a credit broker and it has a commercial agreement with Barclaycard where it promoted the Barclaycard Freedom Rewards card to customers. Barclaycard confirmed that if BHS were to cease trading then customers would no longer collect points there using their card (but would still do so on all other spend), and they wouldn’t be able to convert their points to BHS vouchers for spending there.
Barclaycard adds that any customers who have BHS vouchers outstanding should still be able to use them, but if they were to stop being accepted, it would allow customers to replace them with an alternative (subject to being able to confirm the validity of the voucher).