More than a month after it was bought out of administration, House of Fraser customers are still waiting on refunds for cancelled orders and gift card replacements.
High street sportswear chain Sports Direct bought the ailing department store House of Fraser out of administration on 10 August.
It was announced at the time that it would be business as usual for the new House of Fraser.
But for many customers this couldn’t have been further from the truth, with some reporting that they’ve been left hundreds or even thousands of pounds out of pocket.
Adam French, Which? consumer rights expert, said: ‘The communication from House of Fraser has been atrocious.
‘It’s now more than a month since customers were promised refunds for cancelled orders and told to send their gift cards in for a replacement – all they’ve heard since is silence.
‘This is no way to treat loyal customers. If Mike Ashley is serious about turning House of Fraser into the “Harrods of the high street” it can’t be done leaving customers in the dark and out of pocket.’
Several House of Fraser customers, have told Which? that following the buyout the company has failed to refund cancelled online orders or provide replacement gift cards as it had previously promised.
Which? reached out to Sports Direct and House of Fraser for comment and was told that technical issues are to blame for late refunds.
A spokesperson said: ‘We will refund online orders placed after 10 August 2018, which were later cancelled, as soon as we are able to, subject to resolving a number of technical issues.
‘We will issue substitute gift cards as soon as we able to. Given the circumstances it should be unsurprising if there are delays in doing so, and as this is a voluntary good will gesture we hope people will understand that we are doing our best.’
House of Fraser: orders placed before it went into administration
Sports Direct has announced that for any issues relating to purchases made prior to 10 August, customers should contact administrators at Ernst & Young (EY).
A Sports Direct and House of Fraser spokesperson told Which?: ‘We have no legal liability for gift cards (or goods) purchased or ordered prior to 10 August 2018. That sits with the old company in administration.’
EY said in a previous statement: ‘Customers can submit a claim against the HF Stores Realisations Limited (formerly House of Fraser (Stores) Limited) for the refund.
‘However, this will be treated as an unsecured creditor claim and unfortunately they will only receive a very modest recovery against the amount claimed.’
One House of Fraser customer, who chose to remain anonymous, told us that in early June this year, he and his new wife chose to use some of the money they had received as a wedding gift on new a couch from House of Fraser.
But, following the collapse and buyout of the high street department store, he was left out of pocket to the tune of £1,500 with nowhere left to turn.
He said: ‘We received an email from another company, stating that House of Fraser had not completed a payment and therefore we could not receive our couch. We did not even know the couch was coming from a concession and this was never mentioned to us at the time.
‘We basically feel cheated; we have been robbed of more than £1,500. In good faith, we paid for a product but that money was “held” by House of Fraser until it went bust.
‘We have done nothing wrong and fail to see how a man who owned shares in the original House of Fraser can buy the company moments after it enters administration and simply sweep creditors under the carpet?’
- If you paid with cash, vouchers or debit card: If you made an order before the takeover or are owed money, you’ll be joining a long line of creditors owed money. This means you’re likely to get back only a small part of the money you’re owed. You could try a chargeback claim, but it’s unlikely to be accepted by your provider when a company enters into administration.
- If you paid by credit card: If you made an order before the takeover or are owed money, you can make a section 75 claim for goods worth more than £100.This right is particularly useful if the retailer or trader has gone bust, or it doesn’t respond to your letters or phone calls.
House of Fraser: orders placed following Sports Direct takeover
Problems continued even after the Sports Direct buyout of House of Fraser on 10 August, with customers still out of pocket for orders placed after that date.
Another House of Fraser customer, who also chose to remain anonymous, placed an order online on 12 August and the money went out of her account on 13 August.
She told us: ‘I subsequently sent an email to them on 15 August asking them to cancel my order and refund me as it was clear my order was not being processed – I only received a standard automatic reply saying they aimed to respond within five days.
On 16 August, she received an email saying House of Fraser was cancelling and refunding all orders that have not already been sent to customers. But despite several subsequent attempts to contact the retailer all she’s heard in response is silence.
After Which? asked Sports Direct and House of Fraser to answer when customers could expect a refund, we heard ‘a number of technical issues’ were to blame for the delay in processing refunds for cancelled orders made after 10 August.
A Sports Direct and House of Fraser spokesperson also confirmed: ‘No online items purchased after 10 August 2018 have been supplied by us prior to today [Friday 21 August].’
This means anyone who placed an online order after the takeover is out of pocket, having received no goods nor a refund for cancelled orders.
Customers who ordered and paid for goods online after House of Fraser was bought out of administration on 10 August have the right to cancel their orders and claim a refund if they change their mind about the purchase.
This right to cancel an online order starts the moment you place the order and doesn’t end until 14 days from the day you receive your goods.
- Your consumer rights if House of Fraser cancelled your order: As House of Fraser announced on 15 August it was going to cancel all orders not already sent, you’re entitled to get a refund within a reasonable timeframe.
- Your consumer rights if you cancelled your order: If you cancelled your order before House of Fraser did, you’re entitled to get a refund within 14 days of notifying the retailer if you haven’t yet received the goods, or be refunded within 14 days after the date the retailer receives your unwanted goods. The retailer has to refund your money within 30 days at the latest.
Credit card claims, chargeback and interest on late payment
As some customers have heard little to nothing since online orders were cancelled last month, many have already contacted banks to make chargeback and section 75 claims.
The company recently told the BBC that customers shouldn’t make a claim on their credit card and should still be dealing with House of Fraser about their cash and goods.
But as the cancellation of most online orders took place more than a month ago and House of Fraser’s terms and conditions aren’t visible to view, the reasonable timeframe in which to refund customers is long overdue.
For those who haven’t yet received a refund and haven’t been able to make a claim through the section 75 route, you may be entitled to claim interest on the late refund if you can show there has been a breach of contract, but this will have to be done via the small claims court.
House of Fraser gift card replacements
The new Sports Direct owners appeared to be doing loyal House of Fraser customers a good deed when House of Fraser customer service advisers instructed customers to send gift cards to its Baker Street office to be re-issued.
But more than a month later, customers are still in the dark and yet receive anything back, raising concerns that the goodwill gesture may no longer be honoured.
Lauren Barry, a House of Fraser customer, told Which? that she had sent £250 worth of gift cards back to House of Fraser’s Baker Street address on 14 August via special delivery and it was signed for the following day.
Lauren has attempted to contact the retailer via twitter and email, but has so far had no response.
Lauren said: ‘I’ve been keeping an eye on other people’s tweets to see if anyone had been successful, but am yet to see anyone getting any kind of response or refund.
‘To be honest, I’ve pretty much given up hope that I’ll actually get any kind of response from it.’
- Your consumer rights: Getting money back from most gift cards and vouchers after a retailer has gone into administration is usually anywhere from tough to impossible to redeem.
But given that the House of Fraser owner Sports Direct had given commitments to customers to reissue gift cards, and we expect them to stand by its promise.
When contacted for comment, a Sports Direct and House of Fraser spokesperson told Which? that substitute gift cards would be issued as soon as the company was able to do so.