In the event that a shop files for bankruptcy or enters administration, it is possible that your legal rights will be unclear. Please read our guide so that you can gain a better understanding of the benefits that are available to you.

What exactly does it mean to go into administration?

When a business declares itself to be insolvent and enters administration, it indicates that the company will be managed by an appointed administrator, who is required to hold a valid licence as an insolvency practitioner.

The administrator will work with the financially troubled company to either save it through some kind of rescue procedure like a Company Voluntary Arrangement (CVA), sell it to a new owner, or work with the company to wind it up. If the company cannot be saved, the administrator will work with the company to either sell it or wind it up.

If a corporation enters administration, this does not always mean that the company will cease to exist as a business or stop trading completely in the future. However, this typically indicates that you will have a more difficult time exercising your rights.

This holds true even in situations in which it appears on the surface as though business as usual has been resumed, such as when a company that has gone bankrupt is purchased very quickly.


What is the key distinction between putting a company into administration and liquidating it?

The objective of the administration is to assist the company in repaying its debts in the hopes of avoiding insolvency. If this is effective, it may pave the way for the company to get back on its feet.

In the event that the administration is unable to save the firm or find a new owner, this typically results in the company being liquidated.

Before a corporation is totally dissolved, it must first go through the process of liquidation, which entails selling off all of its assets.

Can I return products to a store that has closed down because it went out of business?

It depends. Once a retailer has entered administration, the purpose of the administrator is to try and salvage the firm, and in order to do so, it may decide not to accept returns on any items purchased from the retailer.

You might make a claim for a refund in the event that the products you purchased were not delivered to you, or you could make a claim for the expense of having them repaired in the event that they were defective.

After a company has been placed into administration, do my rights to return items still stand?

You may be able to seek a replacement or a refund in the normal way in accordance with the Consumer Rights Act if you have been supplied with faulty products and the firm that sold them to you has been placed into administration but is still operating normally.

In the event that the business is unable to continue operations while it is undergoing administration, you will be required to submit a claim to the administrator in the capacity of an unsecured creditor; hence, it is highly unlikely that you will be issued a refund in this scenario.

However, if you do not make a claim to the administrators in writing, then it is quite doubtful that they will be able to receive their money back. We believe that you should give it a shot at the very least.

In the event that you received a damaged item, you have the option to file a claim with the administrators in order to receive reimbursement for the cost of repairing the item or, if there is still time to reject the item, a refund.

After a company has been forced into administration, am I still able to use the warranty that I purchased?

If you purchased a product that was defective and it came with a warranty, you should be able to make a warranty claim against the manufacturer for a refund or repair of the product in accordance with the conditions of the guarantee.

It is possible that you will be able to file a claim against an extended warranty if coverage was provided by a third party (eg an insurance company).

If the store you bought the items from goes out of business and they turn out to be defective, you should be covered by the guarantee from the manufacturer for at least the first year.

Verify this with the relevant documentation and see if it bears out.

Look closely at the fine language to determine who, if anyone, is actually providing the warranty cover. If it’s provided by a third party—like an insurance company, for instance—then you probably won’t be affected if a store goes out of business.

If coverage was offered by the merchant in question, then the outcome will be determined by what takes place after the administration period has concluded.

If the retailer goes out of business, then it’s too bad for you because you won’t be able to take advantage of the extended warranty.

Keep in mind that the majority of the time, an item will come with a warranty from the manufacturer that will offer you some protection for at least the first year, and occasionally even longer.



Business is possible for a merchant to refuse to accept gift vouchers or chargeback claims in the event that it enters administration. On the other hand, the administrators may decide to return some or all of the money you paid.

If the product you purchased turns out to be defective, the guarantee from the manufacturer should cover the repair or replacement costs for at least a year.

A claim under Section 75 of the Consumer Credit Act, which could be filed on your credit card, is another option for you.

I’d like to make a claim with my card company.

If you paid for products with a credit or debit card and the total price was less than one hundred pounds, you might be eligible to file a chargeback claim.

If you have made a purchase on your credit card for more than one hundred pounds, this indicates that the card provider is jointly accountable for any breaches of contract that may have occurred.

If the product is defective, you have the right to make a claim under Section 75 of the Consumer Credit Act.

Send an email to the firm that issued your credit card with the specifics of your claim. In the event that a merchant declares bankruptcy, you can submit a request for a refund from your credit card provider by using our sample letter.

Can I make a claim even though I’ve only paid the deposit?

You are not need to have paid the full amount that was charged to your credit card; the card company is still liable even if you only paid a portion of the payment (for example, a deposit) using your card.

It is not the amount that is paid on the card but rather the worth of the items that are being purchased that is important.

No matter how much you used your credit card to make the purchase, as long as the product’s worth is between £100 and £30,000, you are protected under Section 75 of the Consumer Credit Act.

If you ordered a new camera online and paid a deposit of £50 with your credit card and the remaining balance of £500 with a check, for instance, you would be protected for the full amount of £550 in the event that the firm went out of business and you did not receive your camera.

Even if the company that issued my gift vouchers has gone out of business, are I still able to use them?

After entering administration, a number of high street stores have implemented a policy that prohibits customers from using gift cards purchased from the store. Sadly, you are not breaking any laws by doing this.

If the administrator does make this choice, however, it is best to hold off for a few days to see if they will alter their minds.

In the event that your gift vouchers are rejected, you are required to submit a claim to the administrators in writing together with evidence of your vouchers.

On the website of the retailer that has entered administration, the name of the administrator will be listed. You can locate this information.

However, there is no assurance that you will get all of your money back, and the process of filing a claim and having it correctly processed could take as long as a year. In addition, not all administrators will choose to proceed in this manner.

You can use our sample letter to submit a claim for a refund for vouchers purchased from a business that has gone out of business in order to get your money back.

I would like to file a chargeback claim; is that possible with gift vouchers?

If a business is willing to take gift certificates as payment, then chargeback claims will not be honoured.

If the gift certificates you purchased with your credit card aren’t being accepted, you may be able to file a chargeback request with your bank on the basis that the vouchers are fundamentally different from what you paid for.

This is because you had anticipated that you would be able to trade the vouchers in for things of a particular value; nevertheless, you have discovered that the coupons are worthless.

It is going to be more difficult for you to make this claim if the coupons were a present to you. It is not possible for the individual who was given a voucher to make a claim on it.

However, the individual who purchased the vouchers has the ability to submit a chargeback request to the bank. In order to assist you in filing a chargeback claim, we have provided you with a letter template that you can use.

However, it should be brought to your attention that there is no assurance the administrators will agree to chargeback requests.

When will I receive my cashback?

If you were expected to earn cashback as part of your purchase, it depends on how the cashback offer was set up – you may still receive it. If you were supposed to get cashback as part of your purchase, you may still receive it.

Check the terms and conditions to determine whether the offer is guaranteed by the manufacturer (which would mean that they will pay the cash as long as you claim it in the way that they specify) or whether the cashback claim should be made to the merchant instead.

If the cashback is being provided by the manufacturer, then your claim shouldn’t be affected in any way.

In the event that it was the merchant who was at fault, you would still be able to file a claim, and they would be in violation of the contract if they failed to provide the cash.

Under the unfortunate event that you were unable to obtain the cash, you will not be able to initiate legal action against the merchant while it is in administration.

In the event that the merchant ceased operations at the conclusion of the administration process, you would be required to file a claim with the administrators for any unpaid cashback.