// Arcadia tells shoppers they will not be able to use vouchers to cover their entire spending value
// Shoppers with a £20 voucher would have to spend £40 to use it up
// The retail group, which owns Topshop, fell into administration putting 13,000 jobs at risk
// Administrators are not obliged to honour gift cards and vouchers
Arcadia Group has reportedly said customers holding gift cards and vouchers for its brands will only be able to use them to cover half the price of their purchase.
Shoppers who have gift cards for brands such as Topshop, Topman, Miss Selfridge, Dorothy Perkins, Evans and Burton, said they were unable to use them to make purchases on Wednesday.
Arcadia initially responded by saying it was a technical issue, but once the system was back up and running, it said customers would not be able to use them to cover their entire value but could only put them towards a purchase, The Guardian reported.
READ MORE:
- Arcadia Group: What went wrong?
- Mike Ashley under fire for offering Arcadia £50m lifeline but ignoring rent bills
Sir Philip Green’s retail empire appointed administrators from Deloitte on Monday, after talks with a number of lenders about an emergency £30 million loan hit a dead end.
The administration has placed 13,000 jobs at risk.
Mike Ashley’s plans for an emergency £50 million loan to Arcadia Group also fell through.
Earlier this week, UK ministers said they were keeping “a close eye” on Arcadia Group’s administration due to the controversy surrounding the management of the company.
Green’s family agreed on Wednesday to pay £50 million into their fashion empire’s pension scheme within the next 10 days – almost a year earlier than scheduled – as the business secretary, Alok Sharma, called on the insolvency watchdog to investigate the handling of the failed group.
Sharma asked the insolvency watchdog to examine whether the conduct of directors at Green’s Arcadia led to problems for the group’s pension fund.
Arcadia’s administration left a pension deficit estimated to be as much as £350 million.
Despite the administration, Arcadia is still trading in shops and online.
Administrators are not obliged to honour gift cards and vouchers, and holders are creditors who would be in the queue for a payment when the business is wound up.
Holders of Arcadia’s cards and vouchers have been told they will still be honoured, but they cannot be used to cover more than 50 per cent of their purchase.
Someone with a £20 voucher would have to spend £40 to use it up.
Arcadia said gift cards remain valid and, once functionality resumes, customers will be able to use them in store and online for up to 50 per cent of the balance of the total purchase.
BHS made a similar change to its cards when it went into administration in 2016.
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