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Republic owner refuses to honour vouchers for bust fashion chain Republic owner refuses to honour vouchers for bust fashion chain
(5 months later)
About 78,000 shoppers who bought gift vouchers from the fashion chain Republic will be left empty-handed after Sports Direct, which bought the store group from administration, refused to honour any claims.About 78,000 shoppers who bought gift vouchers from the fashion chain Republic will be left empty-handed after Sports Direct, which bought the store group from administration, refused to honour any claims.
It is understood shoppers were left holding vouchers worth £1.2m in total when Republic went into administration, in February. But Sports Direct, which reported booming interim profits in February, said: "It is not our responsibility to honour the vouchers."It is understood shoppers were left holding vouchers worth £1.2m in total when Republic went into administration, in February. But Sports Direct, which reported booming interim profits in February, said: "It is not our responsibility to honour the vouchers."
Sports Direct, founded by the Newcastle United owner, Mike Ashley, paid £9.8m for 116 Republic stores and stock, and will retain the Republic branding. But the company quashed hopes that voucher-holders will earn an HMV-style reprieve.Sports Direct, founded by the Newcastle United owner, Mike Ashley, paid £9.8m for 116 Republic stores and stock, and will retain the Republic branding. But the company quashed hopes that voucher-holders will earn an HMV-style reprieve.
A week after the record store group collapsed, in January, the administrators, Deloitte, backtracked and said gift vouchers would be honoured. Vouchers sold by the failed electrical retailer Comet were also later reinstated.A week after the record store group collapsed, in January, the administrators, Deloitte, backtracked and said gift vouchers would be honoured. Vouchers sold by the failed electrical retailer Comet were also later reinstated.
But Sports Direct and Republic's administrators, Ernst & Young, are holding firm against shoppers, many of whom will have seen no difference to the Republic stores, which continued to trade during administration.But Sports Direct and Republic's administrators, Ernst & Young, are holding firm against shoppers, many of whom will have seen no difference to the Republic stores, which continued to trade during administration.
In a statement, Ernst & Young said: "Republic is unable to honour gift cards purchased before 13 February 2013. It is also not possible to refund customers for unredeemed balances on gift cards as these payments were made to Republic (Retail) Limited prior to it entering an insolvency process."In a statement, Ernst & Young said: "Republic is unable to honour gift cards purchased before 13 February 2013. It is also not possible to refund customers for unredeemed balances on gift cards as these payments were made to Republic (Retail) Limited prior to it entering an insolvency process."
Gift cards rank as unsecured claims against Republic, and although holders can send their details to the administrators, the chances of a payout are virtually nonexistent. But Citizens Advice said customers with worthless vouchers may be able to use "chargeback" to reclaim their money, if they paid with a debit or credit card. A spokesperson said: "You could be protected under rules which make your card provider jointly liable for any problems. Contact them directly to see if you can get the money back."Gift cards rank as unsecured claims against Republic, and although holders can send their details to the administrators, the chances of a payout are virtually nonexistent. But Citizens Advice said customers with worthless vouchers may be able to use "chargeback" to reclaim their money, if they paid with a debit or credit card. A spokesperson said: "You could be protected under rules which make your card provider jointly liable for any problems. Contact them directly to see if you can get the money back."
Pressure is growing on the government to improve protection for shoppers, who bought vouchers worth £4.7bn last year but may find them worthless when a retailer collapses. The UK Gift Card and Voucher Association said it was in talks with the Department for Business, Innovation and Skills to give holders better rights.Pressure is growing on the government to improve protection for shoppers, who bought vouchers worth £4.7bn last year but may find them worthless when a retailer collapses. The UK Gift Card and Voucher Association said it was in talks with the Department for Business, Innovation and Skills to give holders better rights.
"The problem is with regulations around administration rather than with vouchers," said the association's director general, Andrew Johnson. "We would like to see holders of vouchers go much higher up the food chain if a retailer goes into administration.""The problem is with regulations around administration rather than with vouchers," said the association's director general, Andrew Johnson. "We would like to see holders of vouchers go much higher up the food chain if a retailer goes into administration."
Despite the grim tally of retail collapses in which problems with vouchers have featured prominently, the association said sales of gift cards and vouchers actually increased by 3% in the first quarter of 2013 compared with the first quarter of 2012.Despite the grim tally of retail collapses in which problems with vouchers have featured prominently, the association said sales of gift cards and vouchers actually increased by 3% in the first quarter of 2013 compared with the first quarter of 2012.
A recent YouGov poll commissioned by the gift card operator One4All, surveying 2031 people, found that 86% of adults in Britain believe all gift cards should be regulated to protect consumers in the event of retailer collapse.A recent YouGov poll commissioned by the gift card operator One4All, surveying 2031 people, found that 86% of adults in Britain believe all gift cards should be regulated to protect consumers in the event of retailer collapse.
The Citizens Advice chief executive, Gillian Guy, said: "Consumers lose out when shops in financial trouble continue to sell gift cards or offer them as store credit when people return faulty items.The Citizens Advice chief executive, Gillian Guy, said: "Consumers lose out when shops in financial trouble continue to sell gift cards or offer them as store credit when people return faulty items.
"If the store goes under, many people will never get to spend their vouchers, so we would like to see more retailers signing up to the Trading Standards approved code, which protects gift card purchases.""If the store goes under, many people will never get to spend their vouchers, so we would like to see more retailers signing up to the Trading Standards approved code, which protects gift card purchases."
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