Like so many areas of daily life, the coronavirus pandemic has had an unprecedented impact on consumer rights issues. As well as the well-documented issues around travel, it’s estimated that over £100 million has been lost in vouchers expiring during lockdown. That’s not including the gift cards, vouchers, and returns for businesses that have gone into liquidation or administration. What action should you take and what are your rights? How can a Solicitor help? Following on from this week’s Law Society Solicitor Chat, Andreea Brindas from FJG’s Corporate & Commercial team has provided some answers to a few frequently asked questions around this topic.
I have vouchers for cinema and restaurant chains that expired during lockdown last year. Should these be automatically extended?
According to the Competitions & Markets Authority’s guidance, consumers have 2 options i.e. request an extension of the expiration date of the vouchers or request a full refund from the vendor.
However, the most recent statistics show that 49% of expired vouchers received an automatic extension of time, 15% received an extension of time upon request from the consumer, and 36% received no extension of time at all, meaning that the consumers lost the value of their vouchers.
It is important to note that vouchers are purchased under a contract and the transaction is usually subject to the vendor’s Terms and Conditions – this means that the person who purchases the vouchers will be bound by such terms. Your rights to an automatic extension of time and/or refund will therefore be subject to and set out within the vendor’s Terms and Conditions.
Is there any difference to my rights if I have vouchers, gift cards, or returns for a business that has gone into administration, compared to one that has gone into liquidation?
If a company has gone into administration, the administrators see customers with vouchers as creditors. This means that you will be among the business’ other creditors, who are all trying to claim back any money owed. So, to get your money back, you will need to make a claim in writing to the administrators with proof of your vouchers.
It is important to note that sometimes the administrators may decide to honour gift vouchers/cards – therefore you may wish to check in-store if the voucher can still be used.
If I have a branded gift card for a parent company, can this still be used to buy items from one of their brands if that brand has now been sold to another retailer? For example, if I had an Arcadia group gift card, can I still use this to shop at Topshop online store now that the Topshop brand has been sold to ASOS?
This will depend on the purchaser’s decision i.e. in this scenario, ASOS. ASOS may accept gift cards and vouchers from the previous operation, but this is not guaranteed, and you may wish to check this with them directly.
If my package tour holiday has been cancelled, should I accept a travel voucher, and will this have the same level of ATOL protection as my original booking?
If your package holiday has been cancelled, you are entitled to a cash refund by law and we would strongly recommend that you seek a cash refund instead of a credit note/voucher.
However, if the holiday company is unable to offer you a cash refund at this stage, you could accept a credit note/voucher provided that this is classed as a refund credit note and is not incentivised.
According to the Civil Aviation Authority’s (CAA) guidance, ‘refund credit notes’ (RCNs) issued after 10th March 2020 solely due to the COVID-19 pandemic will have ATOL protection until an end date yet to be confirmed. All RCNs will need to be redeemed with the issuing ATOL holder for either cash or against a new booking by 30th September 2022; any unredeemed RCNs after this date will cease to be ATOL protected.
Any vouchers from holiday companies that are incentivised i.e. offer a larger amount than originally paid – will not be ATOL protected. The holiday-maker company should make it clear when the voucher is issued that such incentive is not financially protected, but, in any event, we would recommend that such incentives are documented separately rather than RCN to ensure that the protection offered to the RCNs is not affected.
Am I entitled to change my mind if I have already accepted a voucher from my holiday company or airline?
If you have already accepted a refund credit or voucher, you should tell the holiday company you have changed your mind and ask for a refund. If this does not work, it is better to use a credit note than a voucher to book a new package holiday as this will at least be ATOL protected.