I bought a gift voucher for a restaurant that ceased trading, but the owners have not replied to emails or registered letters requesting a refund.
ACT consumer affairs can’t help as the business is not bankrupt. It’s not so much the money as the principle, as there must be many more people in this situation. But it’s not worth the cost or effort to go to small claims. Is there anything I can do?
– Helen, New South Wales
How disappointing! And what a slog for you to now have to try to navigate the unnecessarily complex world of gift cards.
New laws introduced in 2019 mean that gift cards should be available to be used for a minimum of three years from their issue date. I am assuming that your gift card falls within this timeframe, in which case I do think you have recourse, even if the business is not insolvent.
To clarify, when a business does become insolvent or “goes under”, a consumer with a gift card would be considered an “unsecured creditor” of that business. This means the consumer is someone who has given money to the business without receiving an asset – or in your case, a service. Unsecured creditors are generally last on the list of people to be paid back once an administrator is appointed to settle the business’s debts. If the business was insolvent, there is a process you could follow to get in line for your money back (which is outlined well by Choice, in case you’re interested in learning more).
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It sounds like the business you bought a gift card with isn’t insolvent and closed voluntarily. This is a little bit more of a grey area, with no clear pathway to resolution. Owning the voucher means you have a contract with the business, but if the business no longer exists, it can be tricky to enforce that contract. In this case, the restaurant is closed, so they won’t be able to provide you with a service.
Your only option is to try for a refund. The first step I would usually recommend is contacting the business, but you’ve done that and had no luck. You could certainly take legal action, but given the likely value of the gift card, as you say, the cost and effort might not be worth your while.
The second thing you can do is attempt a chargeback from your bank. If you paid for the voucher with a credit or debit card, you may be able to claim a chargeback. Chargebacks are generally constrained by fairly tight time restrictions, which are determined by individual financial institutions.
Call your bank as soon as possible to find out the time limit for requesting a chargeback. If you bought the gift card within the time limit allowed by the bank, go ahead and file a chargeback – I think in your circumstances this could be a successful avenue if you’re within the time limit.
I would also go ahead and lodge a formal complaint with the ACT’s jurisdictional consumer body, Access Canberra, even though they said they couldn’t help you.
A complaint on record might reveal a systemic issue if more people eventually complain, which might prompt Access Canberra to investigate or take action.
What’s happened to you is certainly unfair, but unfortunately might be hard to remedy.
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