A company goes into administration when it gets into financial difficulties and the administrator’s job initially is to try and save the company.
This may mean streamlining it, for example, by reducing the number of stores to take out the less profitable ones or looking to find a buyer for the business.
While the administrator is going through this process the company may in the main continue to operate as it had before the administration.
Ultimately the company may be liquidated if the administrator’s efforts are unsuccessful or a buyer can’t be found.
It depends. When a company goes into administration the administrators get certain powers to help turn the company around.
These powers enable them to refuse to accept vouchers if they consider this is in the best interests of the company.
Keep an eye on the administration progresses as the administrators may initially decide not to take vouchers and then later decide they will.
Because of the powers the administrators have, in practice there is little you can do if they fail to accept vouchers.
Once the company is in administration, you're not able to take legal action against it (for the breach of contract).
However, you do have some options. If a company does go into liquidation and you haven’t been able to use your vouchers you should register a claim with the liquidators for the value of the vouchers (contact them to confirm the process for lodging a claim).
Unfortunately, you'll only be an unsecured creditor and you may only get a small proportion of the sum you're claiming or nothing at all.
If the voucher or amount put on a gift card was for more than £100, then it may be possible for the person that bought it to claim the money back from their card provider.
But be aware that where the voucher or card was bought through a third party, such as a supermarket, then you may find it more difficult to get the card provider to accept that Section 75 applies.
If you're buying more than £100 worth of vouchers, try to buy one voucher or a gift card for this sum rather than a number of vouchers of lower denominations.
If you buy the vouchers or gift card in this way using your credit card, it will be clear you have one single item costing more than £100 giving you a better chance of using Section 75.
Making payment direct to the company issuing the voucher or card again increases your chances of successfully arguing a claim under Section 75.
If there's something you know you want, then it makes sense to buy it as soon as possible in case the company does go into administration and the administrators decide they won’t accept vouchers.
Some people may prefer to wait to see if they can use their vouchers to get a bargain if the company has a closing down sale.
This is a much higher risk strategy as the administrators may not accept vouchers on sale items or at all once they've been appointed.