What to Do When a Store Goes Under?

October 25, 2012 by warzan

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It's a sad fact, but in today's economic climate some stores have had to face closure. But what can this mean to us who have tried to buy something from the store, only to watch it go under? I've taken a look at some of the policies in place to help you know what to do.

OK, so here's the situation. You have just forked over your hard earned wages to buy that super awesome destructo-bot that you're army has needed for a while. Unfortunately, the company which you bought it from has gone bankrupt and you're left without your miniature or your money. What do you do?

Well that it turns out, is not so simple to answer and depends greatly on where in the world you are, below we have taken a stab at pulling together the information we believe is relevant to UK consumers, and while it may be similar where you are from it's up to you to find out. The good news however is in a lot of situations there is something you can do - in a nutshell contact your card company or bank, when you fail to get support or a resolution from your store.

So... in the UK chances are that you will have paid for your miniature using either PayPal, a Credit card, or a Debit card. Each of these payment options has different procedures in place to help you if you have not received your purchase. Let's take a look at Credit and Debit cards first.

Purchases of over £100 made using a Credit card receive protection from Section 75 of the Consumer Credit Act. This means that should your purchase not be delivered, or be infringing upon your rights as a customer (which can be found at the Department for Business Innovation and Skills), your credit company is jointly liable with the company from which you bought the product.

So, as long as your purchase was over £100, you would be able to put a claim in with your Credit card company. The Citizens Advice Bureau provide help in writing a letter for claiming joint liability.

However, Debit cards, along with Credit card purchases under £100, do not receive any protection from Section 75. Instead, some card providers (such as Visa or Mastercard) offer a Chargeback service. This will allow you to claim for purchases which might not otherwise be covered by Section 75.

The details of the Chargeback schemes offered by each of the card companies may differ slightly and you will need to check these beforehand to see if you are viable for a Chargeback claim, but for the most part claims need to be made with 120 days.

Of course, instead of paying with a card you may have used the online services provided by PayPal. PayPal's policies regarding what to do if you don't receive the product you ordered, or there is something significantly wrong with it, can be found on their Legal Agreements page, specifically the Key Payment and Service Information section.

As a customer, you are protected by PayPal's Buyer Protection Policy.

PayPal Buyer Protection Policy

  • Our Buyer Protection Policy assists buyers of goods who send payments via the Service to recover a certain amount of funds from sellers.
  • It applies when the above mentioned sellers, under certain circumstances, do not send the promised goods, or deliver goods which are 'significantly not as described'. - PayPal

PayPal will provide a refund if a dispute is settled in your favour. However, it is important to note that you must raise the dispute within 45 days. You then have 20 days to escalate it into a claim, so you need to be highly aware of these deadlines when looking for settlement.

The various details of these issues can usually be found with the company you made your payment through, so if you have made an order with a store which has now become bankrupt before you could receive your purchase, be sure to get in contact with payment company as quickly as you can.

If you have any further questions, comments, or clarifications regarding these issues, or have some insight into how the process works in your part of the world, just drop a comment below and ourselves and the community can discuss it.

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