Some New Look shoppers have been left furious after the retail chain refused to accept its own vouchers as payment for purchases made during its closing down sale.
The move by the retailer prompted the State’s consumer watchdog to immediately intervene. It is currently negotiating with the liquidators to ensure those with vouchers are not left out of pocket.
The British fashion chain announced last week it was shutting its 26 shops in the Republic after deciding the Irish business was no longer viable having amassed debts of €17.7 million.
In a High Court hearing last Thursday seeking the liquidators’ appointment, Mr Justice Brian Cregan was told New Look Retailers (Ireland) Limited had built up debts to such an extent that its UK-based parent company was withdrawing financial support and provisional liquidators were now required due to the “substantial” debt.
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The company appointed Shane McCarthy and Cormac O’Connor of KPMG Ireland as provisional liquidators to oversee the winding down of the business and announced that a closing down sale would begin on Sunday.
Queues formed outside the shops in advance of the start of its closing down sale with shoppers hoping to find bargains before the retail chain disappears from the Irish retail landscape.
However, people with vouchers were told they would not be accepted in the stores and were instead encouraged to contact the liquidators to see if anything could be done for them.
“Our daughter received New Look gift vouchers for Christmas,” one parent told The Irish Times. “She tried to redeem them at today’s closing down sale in the Jervis [Shopping] Centre but the vouchers were refused.”
Instead the 12-year-old was handed a form and told to send it to the liquidator’s office.
“I suspect the vouchers are now worthless,” the parent said. “But I’m surprised the vouchers were refused given the stores were still open and trading.”
It is not uncommon that vouchers lose their value when a company goes into liquidation with impacted consumers becoming what is known as unsecured creditors.
As such, they do retain a claim on the assets of the company but typically are the last to be paid. They have to take their place in a queue behind the liquidators themselves, Revenue, secured creditors such as banks and employees.
However, the Competition and Consumer Protection Commission (CCPC) told The Irish Times that the Consumer Protection (Gift Vouchers) Act 2019 covers the use of gift vouchers in Ireland and “contains no exemption for sales of any kind, including closing-down sales”.
The CCPC said its officers “contacted the liquidators in this case late last week regarding a number of consumer protection concerns”.
“In our correspondence, we sought clarification on arrangements for the use of gift vouchers by consumers,” the CCPC said.
If consumers are blocked from using the vouchers, another option that might be open to some would be a chargeback against the company although that depends on whether or not the vouchers were paid for with a credit or debit card.
Chargebacks allow people be reimbursed by their bank if they pay for a product or service they do not receive, time limits apply and financial institutions can impose their own rules on how chargebacks are processed.
