How to fight for your giftcard rights

How to fight for your giftcard rights

Are you one of the 78,000 customers out of pocket after the collapse of fashion retailer Republic?

Those with giftcards purchased before 13 February have now lost £1.2 million between them. They join a long list of disgruntled consumers who have been left holding worthless giftcards following a string of high street retail collapses.

Clothing retailer Republic was forced to call in administrators Ernst & Young in February after sales plummeted in the run-up to Christmas. It was subsequently bought by Sports Direct for just under £10 million, but the administrator has confirmed this week that it is unable to honour giftcard purchases bought before the retailer got into trouble and added that it is not Sports Direct's responsibility either.

Either way, it is consumers who lose out.

Calls for reform of the giftcard market are getting louder. Michael Dawson, chief executive of One4all, the company behind a national multi-store giftcard sold through the Post Office, said: "94% of the gift card market is unregulated, leaving customers unprotected and giving administrators and acquiring retailers an additional headache.

"By moving towards a better standard of regulation, the industry can put the consumer first, reassuring they won't be left out of pocket by protecting their funds - and strengthen confidence in the sector".

So if you've got a giftcard from a retailer that has gone bust, what can you do?

  • If the voucher was paid for by credit card, you may be able to claim the money back from your card company, under either Section 75 of the Consumer Credit Act or the Chargeback scheme. Section 75 covers purchases from £100 to £30,000 and means the credit card provider and the retailer are jointly liable should anything go wrong with your purchase. However, if you spent less than £100, your provider might still reimburse you.
  • The Chargeback scheme works in a similar way and although it is not law providers must adhere to, most do so. The scheme also covers debit cards and allows card issuers to reverse a transaction if there's a problem with something you've bought. Claims must be addressed to your card provider within 120 days of finding out there's a problem. The card provider will then pass on a claim to the retailer's bank - but there is no guarantee the claim will be successful.
  • If you bought your voucher with cash or cheques there is no protection and you should contact the administrator to make a claim.

Your Comments

That's the problem with buying gift cards from just any retailer or business. I tend to stick with longstanding companies like Walmart, because they are unlikely to collapse even in the unlikely event of their sales plumetting.