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Debenhams gift cards: Can I get a refund if the company goes into administration?

File photo dated 23/3/2020 of a person walking past a Debenhams store in Nottingham. The department store chain is expected to slide into administration in the coming days following the impact of coronavirus (PA Images): (PA Images)
File photo dated 23/3/2020 of a person walking past a Debenhams store in Nottingham. The department store chain is expected to slide into administration in the coming days following the impact of coronavirus (PA Images): (PA Images)

Department store chain Debenhams is on the brink of administration as a result of the financial fallout caused by the coronavirus pandemic.

On Monday, the company, which has some 22,000 employees, filed a notice of intent to bring in administrators - a "necessary step" to protect the store from the threat legal action, it said.

Meanwhile, the department store is continuing to trade online, allowing orders and gift cards to be purchased, with returns being accepted and processed normally.

So, what are your rights as a customer if the company goes into administration?

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Debenhams is on the brink of administration (PA)

Can I get a gift card refund?

Unfortunately, Debenhams gift cards cannot be exchanged for cash or vouchers, and it is unlikely you would get a refund on the gift card itself.

If a company goes into administration, it is up to the administrator who is brought in to decide whether or not it will allow gift cards to be used - gift card holders are viewed as creditors.

The terms and conditions on Debenhams gift cards warns that the funds are not covered by the Financial Services Compensation Scheme and in the "unlikely event of the issuer of this product becoming insolvent some funds on the card may not be available to spend".

It adds: "There is no right to cancel an online gift card order once the gift card has been spent in full or in part."

The same applies to e-gift cards, where the terms and conditions state: "No change or refund will be given when an e-Giftcard is redeemed but any remaining balance may be applied to future purchases."

As a gift card holder, you would have to join the queue of creditors owed money by the company, according to financial services website Money Supermarket.

So, if a company goes into administration, you’ll need to make a claim in writing to the administrators with proof of your gift card to get your money back.

But, if you used a credit card to purchase the gift card you might be in luck.

Under Section 75 of the Consumer Credit Act your credit card protects anything you buy which costs more than £100 and below £30,000.

So, if the shop goes into administration before the gift card can be spent, you can get a refund through your credit card company.

If the gift card was bought through a third party, you can also approach them for a refund.

It is not guaranteed you will get your money back for Debenhams gift cards, so the advice is to spend it online while you can.

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