Offer a gift card this Christmas? Make sure it’s a gift that lasts

Wokingham shoppers who are giving gift cards to family and friends for Christmas are being warned that they need to understand the potential risks of their purchase – and that includes losing their money if a retailer goes bankrupt.

Garry Lee, Chairman of the R3 South Thames Valley Insolvency and Restructuring Trade Organization, says: “Gift cards are really convenient and can be easily purchased in stores and shops. in line. It is essential that consumers in Wokingham understand how they may be affected if the retailer offering them enters into insolvency proceedings. “

If a store enters insolvency proceedings and is still in business, or has undergone prepackage administration, the coupons may no longer be valid.

“It’s usually a good idea to spend them as soon as possible, especially since your local store may be slated for closing or the situation across the organization can change quickly if the business becomes insolvent, ”Mr. Lee said.

Several well-known stores went bankrupt during the pandemic, as the wider sector continues to face serious business difficulties as the economy begins to open up again.

Mr. Lee, associate director of the Smith & Williamson accounting firm, added: “It is understandably frustrating when a retailer does not accept gift cards during an insolvency process.

“However, the insolvency practitioners in charge of the process are obliged to look after the interests of all creditors according to a strict hierarchy established by law, and unfortunately clients are only one of many creditors involved.

“On the one hand, accepting them could cost the company more money, but on the other hand, failing to do so could damage the relationship between the retailer and its customers.”

And if a retailer changes hands, it is up to the new owner to decide whether they will honor gift cards and vouchers issued before administration.

“Al cannot be lost if a new owner decides not to honor existing gift cards, as the buyer may be able to make a claim with their bank if the card was purchased through a credit card or debit, depending on when the initial payment was made. “said Mr. Lee.

Financial pressures on traders can also be increased by rent payments owed to their landlords around December 25, which is one of the four day shifts of each year when these bills must be paid.

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