has become the latest retailer to slip in to administration, leaving an estimated 12,000 people in the UK awaiting orders potentially losing their money. It’s also bad news for people awaiting refunds or trying replace or repair items that aren’t as advertised.

Let’s cut to the chase. As soon as you hear that a retailer or business that you’ve give money to might go under, claim back the cash you’ve spent as soon as possible and spend your vouchers before they become worthless.

Here’s my guide to your rights if you’re worried about a business going in to administration or liquidation.

When retailers go under

Officially, when a retailer goes bust you join the long list of creditors who are owed money by the business. In reality, you join the back of a very long queue.  However, the process of a firm going in to administration isn’t usually instantaneous. There’s often a window of opportunity where you can quickly spend the voucher or recall card payments before the firm goes under.

Get on the phone to your debit or credit card provider and ask them to ‘charge back’ your money. I often talk about the charge back scheme in this column, but in this case, it can often be the quickest way to reclaim your money. Make sure the card provider understands that speed is of the essence. They should not usually ask you to fill out a form if a firm looks like it might go under.

Goods and services bought on a credit card

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. That means that you might be able make a claim from your credit card provider if a retailer folds. Seeing as we’re approaching the season of spending, I’d recommend putting any significant purchases on your credit card for precisely this reason. Pay off the card straight away though.

Vouchers and gift cards

If you have a gift card or voucher with a retailer who is reportedly struggling, then if they have a high street shop get down there as soon as you can and spend the credit. At least that way you can walk out with the goods. Spending online leaves you at the mercy of the firm going bust mid-return.

When a retailer gets taken over

You may have heard that Next is planning on buying the brand. This does not mean that they are taking on the liability for the pre-existing orders, I’m afraid. When a business is bought or taken over, then the responsibility for purchases and existing contracts (like the one you enter in to with a retailer every time you buy something) usually carries over to the new owner.

However, when a retailer is in administration or liquidation, it has effectively ceased to exist. Think of the business and its assets as being part of a big yard sale. Bits are sold off to anyone who wants them, but if you buy the name, you don’t buy the responsibility.

Returns and refunds

Things get more complicated if you need to return goods or replace faulty items. Often this is at the discretion of the administrators of the defunct firm. Once again, you may be able to ask your bank or card provider to charge back your money for undelivered items or pending refunds. You might be able to make a complaint to the original manufacture of the goods if they are not working or damaged, or claim on a warranty if you have one.

Future planning

It’s likely that more retailers will go under in the coming year, so make sure you pay on a credit card or debit card ideally and keep an eye on the news. If you hear rumblings of disaster, then swing in to action and charge back your cash.

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist.

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