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A consumer guide to administration: BHS and your rights

View profile for Heather Roberts
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A consumer guide to administration: BHS and your rights

There has been a shock announcement this week that the retailer, BHS, has fallen into administration leaving many of their customers wondering what that means for them. 

Our short guide addresses some of the more common issues you might encounter if you are a customer of a company which goes into administration.

Store Vouchers

Some customers may have in-store vouchers, of a cash value, to use in store. These may have been bought as a gift. With the company going into administration, can these vouchers still be used? 

Legally, a company in administration has no obligation to refund a customer the cash value of their vouchers. What’s more, if and when that company ceases trading, customers will be unable to ‘cash in’ these vouchers, or get their money back. Whilst some administrators can choose to allow vouchers to be cashed in after an administration, this only happens in a handful of cases. Any customers with unspent vouchers would simply become one of the business’ many creditors (parties to which money is owed), and, given the small amounts of money at stake, would probably not get their money back.

Our advice is that you should spend any vouchers, or redeem any credit notes, as quickly as possible, in store.

BHS has issued a statement to clarify their position on vouchers, which you can read on our Facebook page.

Unfulfilled Online Orders

Until stores actually close – if, indeed, they do close - it would normally be the case that the business will continue to trade as usual and any existing orders placed should be fulfilled, subject to stock availability. If you are a customer, and are worried about this, you should call the company and find out the status of your order, and whether you are likely to still receive it. It would not be advisable to place an online order after you become aware of the company falling entering administration.

If the store can no longer fulfil the order, then they should refund you, however if they are unable to do so, you may have to file a claim with the administrator.

If you paid for your order using a credit card online, and it cost more than £100, Section 75 of the Consumer Credit Act 1974 states that you can claim the refund directly from your credit card company, if the store is unable to refund it to you. This can often be a far quicker, and less stressful process than having to bring a claim against an administrator.

Faulty Items

If you have purchased something from the store in the last six years, and discover that it is faulty, or not fit for purpose, you would normally be able to bring a claim against the retailer under the Sale of Goods Act 1979 (if purchased before the 1st October 2015), or the Consumer Rights Act 2015 (if purchased after 1st October 2015).

With a company that has gone into administration, however, this could be more difficult, if not impossible.

Again, if you paid for your order using a credit card, and it cost more than £100, you can bring this claim against your credit card company, instead of the store, under Section 75 Consumer Credit Act 1974. You should therefore contact your credit card company as soon as possible to discuss this with them, and to ask them for the relevant forms to complete.

For legal advice from our specialist consumer solicitors, click through to our consumer blog or call 0175 321 6399.

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