Help – I have a gift card and the retailer is going bust – 5 Top Tips
Intu, owner of some of the UK’s biggest shopping centres, has said unless it can raise more funds, it might not survive. Intu wrote down the value of its shopping centre sites by nearly £2bn, and has debts of £5bn. Earlier attempts to raise £1bn were not successful. The Coronavirus pandemic and shoppers staying away in droves, some form of insolvency process may be on the horizon.
As part of its offering, Intu, in common with other shopping centres, offers gift cards to be spent in any of the shops in the centre. These are great if you cannot think what to buy your loved one, but in times of economic uncertainty, can be a waste of money.
- The gift card/voucher is a contractual arrangement between the buyer and the retailer. The buyer is not usually the recipient of the gift card as they are typically bought for someone else. The recipient of the card has no contractual relationship with the retailer.
- You may not realise, but gift cards often have a very short lifespan – and expire in unreasonably short time frame. Once they have expired, the retailer has no contractual obligation to honour them. The gift card is then worthless. Spend them when you get them! Every year 6% of the vouchers bought lay forgotten in drawers and wallets.
- If the retailer goes into administration, the administrators may continue to trade the business with a view to selling it as a going concern. The administrators may accept your gift card, but again has no obligation to do so. Once in administration you cannot sue the retailer because of the moratorium in place.
- If the retailer truly goes bust and into liquidation, the gift card holder becomes an unsecured creditor and takes their place in the queue, behind any secured creditors, the liquidator’s fees, the employees, HMRC, the creditors holding floating charges, and then finally all the unsecured creditors. The likelihood of getting paid is very small as insolvency law does not give consumers any special protection.
- If a credit card was used to purchase the card, the buyer may be able to claim against their credit card supplier.
So, if you feel inclined to give a loved one a gift, think about cold hard cash, it may actually get spent!
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