Over the last few years, loads of big retail chains have ceased trading, along with countless other smaller businesses.

Wilko is the latest retailer to announce that they are struggling to stay afloat, the latest in a long line of high-street favorites who’ve fallen on hard times.

Whenever a business goes bust, I’m inundated with enquiries from readers who are concerned about items they’ve purchased but haven’t arrived, credit notes and gift cards that haven’t been spent and things they’ve bought that they need to send back.

Here’s my guide on everything that you need to know about your rights – and how to protect yourself when paying for goods and services.

What happens when a business goes bust?

Depressingly, when a firm officially goes bust you join the long list of creditors who are owed money by the business. In reality, you join the back of the queue. It’s very rare to actually get any cash back. So for most people, when a firm goes into liquidation any cash you’ve paid along with vouchers and gift cards vanishes – even if you’ve not had the goods.

If you want to pursue a complaint – or believe you are owed money – the business’ website should provide the details of the liquidators (the organisation that is appointed to manage the wrapping up of the business and its assets).

However, the process of a firm going into administration isn’t usually instantaneous. There’s usually a window of opportunity where you can quickly spend the voucher or recall card payments before the firm goes under. Sometimes, like with Wilko, there may be the possibility of a rescue or takeover. But this is by no means guaranteed. Nor does it mean your money or credit will be returned.

There’s no way to definitively prepare for businesses ceasing to trade. You just have to keep an eye on the news and remember what vouchers and store credit you have. Sometimes the administrators of the company will allow you to spend the voucher or card – or may even honor them. But the rule of thumb is this – if you hear a firm is going under, spend the store credit.

Sometimes there are clues. Keep an eye on review websites if you haven’t received the goods that you’ve paid for. A sudden wave of one star reviews is a huge hint problems are on the horizon. Firms that suddenly switch off customer helplines is never a good sign, as are emails and social media posts going unanswered. That’s the time to contact your bank and ask if they can ‘charge back’ your cash.

Vouchers and gift cards

A voucher is a paper, card or virtual document that entitles you to buy goods or services up to a certain prepaid amount. Vouchers can be bought as gifts or issued in lieu of a refund. In fact, huge numbers of people hold vouchers for goods or services that couldn’t take place over the pandemic, from flights to festivals.

Vouchers usually have an expiry date printed on them and you must ‘use it or lose it’ by this date. Many vouchers meet this fate moldering in wallets and purses across the land. This is why businesses like them – people forget to cash them in. If you have a voucher, put a reminder note in your calendar at least a month before the expiry so you don’t lose out.

Gift cards work in a similar way to vouchers and are almost exclusively purchased as gifts. Again, they should have clear expiry dates on them, though there have been disputes in the past about these rubbing off or not being very clear. If you’re making a complaint about a gift card, then the purchaser usually has to make the complaint.

As I mentioned, as soon as you hear a business might be struggling, spend the voucher. If there’s a high street branch then get on down there and get shopping. This is because you’ll physically leave with the goods, as opposed to waiting for an online delivery that might not occur.

In the past there was a general assumption that when a business was purchased or rescued by another party after verging on bankruptcy gift cards and vouchers would be honoured if the firm continued to trade.

That all became a little complicated in recent years. Some new owners suggested that new vouchers would be issued, but we’ve seen hundreds of complaints about this. In short, don’t assume that your vouchers will carry over under new management.

Returns and refunds

If you’re waiting for a purchase that you’ve made in the past to be delivered – or need to return a faulty item – then things can get tricky. As with store credit, you’ll need to act quickly. Contact your bank or card provider asap and explain the situation. Ask them to ‘charge back’ your cash.

As I’ve often mentioned in this column, chargeback is an agreement between banking service providers that means when you’ve paid for goods or services on debit or credit cards the card provider can recall the money if the retailer doesn’t deliver the goods, has debited you without permission, or looks like they might go bust.

When you contact the bank or card provider, explain that you’ve heard about the problems with the business and ask them to charge back your cash as soon as possible. Sometimes you’ll be asked to fill out a form for charge back requests, but when a firm faces liquidation the card provider should recall the money as a priority – so make sure they understand why you’re asking for your money back.

Returning goods can be a real challenge. You’ll need to make a pragmatic decision about whether you want to risk returning faulty items to the retailer because if they go in to administration during the returns process, you’ll probably lose your cash, unless the business is willing to refund you straight away. I’d suggest going to the manufacturer of the goods if there is one, then negotiating with them directly.

How can I protect myself from businesses going bust when shopping?

While you can’t insure against businesses going under, you can hedge your bets by choosing a way to pay that increases your chance of a refund.

If you pay for goods or services on a credit card that cost between £100 and £30,000, the credit card provider is jointly responsible, along with the supplier of the goods or services, for any breach of contract or misrepresentation. This can involve goods not turning up, items that are damaged or don’t do what they are supposed to do or situations where you’ve been misled by the supplier. Most importantly, this includes when a firm has gone bust.

You’re even covered if you’ve only paid a deposit for something on your credit card – and in theory, that deposit amount can be under £100 as long as the total cost of the goods is between £100 and £30,000. In cases like this, you’re still covered for the whole value of the item in question. So if you pay a £50 deposit for a bed that costs £1,000 on your credit card and the rest in cash, if the firm goes in to liquidation the card provider would have to pay you the full £1,000. There’s quite a bit of discussion around the wording of the Act when it comes to deposits, but in theory, even if you’d paid a pound on deposit, you might be able to get a full refund of the sale price.


When a business goes bust, your complaint usually ends. This is the same for complaints that have been made to an Ombudsman or ADR (Alternative Dispute Resolution Scheme). However, in some sets of circumstances, there may be negotiations with the Courts, Government or regulators about schemes to help people affected by the winding up of the business. This will be specified on the business website and you should be notified by the liquidators of any proposals that might affect you.

Featured in Mirror – Martyn James


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