TOPSHOP and Dorothy Perkins shoppers are being urged to spend their gift cards now by money guru Martin Lewis as the retailers’ futures are uncertain.
Martin’s warning comes as Arcadia Group, the struggling company behind Burton, Dorothy Perkins, Evans, Miss Selfridge, and Topshop, desperately needs to win support in a crunch meeting with creditors today.
1 Martin Lewis is urging shoppers to spend Topshop and Dorothy Perkins gift cardsCredit: Rex Features
The company boss, Philip Green, is hoping to use Company Voluntary Arrangements (CVAs) in a bid to save it – but stakeholders will have to agree on the plans first.
If they can’t agree, the business could fall into administration, CVA documents state.
If this happens, it’s unclear whether the shops will still accept gift cards and returns, so the MoneySavingExpert founder is warning shoppers to spend them “soon for safety”.
He also advises shoppers against buying anything with long delivery times or items that might break, as if the shops go under you might not get your money back.
What isn’t covered by Section 75?SECTION 75 of the Consumer Credit Act is a law shoppers can use to get their money back from their card provider if they spent more than £100 on credit card but didn’t get what they paid for.But there are a few things you need to be aware of:
In circumstances when you’ve paid for goods through an agent or a third party, then you may not be able to claim under Section 75. For example, if you buy concert tickets direct from the venue with your credit card, then Section 75 may apply but if you bought them via a ticketing agency then it may not. This is because the card provider could argue that as the payment wasn’t paid directly to the supplier of the goods or service, it doesn’t apply, as it doesn’t have a “direct relationship” with them.
Another grey area is when you pay with your credit card through services such as PayPal. PayPal also has its own refund system, so consumers should use that in the first instance – but you’ve only got 180 days from making the purchase to raise a dispute.
Although Section 75 doesn’t cover debit cards or payments under £100, there is another refund scheme which can help called chargeback. This however isn’t a legal right, so if you’re making a big purchase it’s always best to use your credit card to make sure you’re covered.
With gift cards, while some firms have honoured them when they’ve gone into administration in the past, others have made them invalid and some have changed their terms and conditions.
Martin Lewis wrote on the consumer website: “The problem with insolvency is that once a company is insolvent it has to announce it straight away. So it happens very quickly.
“Clearly, as it’s seeking a form of corporate rescue, the Arcadia Group is not in the most stable state at the moment.
“So personally, until we get firm news that all is going to be fine, if I had a gift card for Topshop, Burtons, Dorthy Perkins or the rest, I’d use it as soon as possible.
“They may become worthless, and clearly I’d avoid buying any gift vouchers from there in the future.
“I’d also be very careful if I was ordering something now for delivery a decent amount of time in the future, and buying any items that might break because returns can be difficult too if a firm goes into administration.”
How to protect yourself from being left out of pocket
If you fail to use your gift card and any of the Arcadia Group’s shops stop accepting them you’ll have to file a request to get your money back to its administrator – if one is appointed.
You’ll then likely become one of a long line of creditors owed cash by the retailer with no guarantee of ever getting your money back.
But you can protect yourself when making online orders by being selective of which cards you use.
For example, if you use a credit card and the purchase costs over £100, you’ll be able to claim your money back from your credit card provider through Section 75 of the Consumer Credit Act.
For debit card purchases, or credit card orders costing less than £100, you may be able to get the money back through the chargeback scheme, although it’s a voluntary scheme and not set out in law.
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In April this year, Debenhams shoppers were urged to spend gift cards as its administration put 4,000 jobs at risk.
Meanwhile, in January, hundreds of furious House of Fraser customers were still chasing refunds and gift card replacements.
If you’re looking to buy a gift card for someone, be careful as hidden terms and conditions mean they could soon be worthless.
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