BHS to file for administration: what it means for you

The 88-year-old British shopping institution will continue to trade as usual, as the administrators attempt to sell the business as a 'going concern'. But there have been major changes to its refund and gift-card policies, while 11,000 staff have been told their jobs are at risk.

Here's some of the key info you need to know, including your rights under the Consumer Rights Act. We've sent a full list of questions to BHS and will update this story when we hear more. For full info on what happens when a firm goes into administration, see our Administration Help guide.

Is BHS closing its doors?

No, as things stand there are no plans to close any of BHS's 164 stores and the company will also continue to trade online while in administration.

A spokesperson for administrators Duff and Phelps says: "The group will continue to trade as usual whilst the administrators seek to sell it as a going concern. Further announcements will be made as appropriate in due course."

While you can still buy items from BHS, it's much safer to do so in store. BHS says the company expects all online orders to be fulfilled – but it can't guarantee this will be the case. Physically leaving the store with the items in your hand once you've paid is the only way of making sure you receive the goods.

What if I've already ordered something for delivery?

A BHS spokesperson told us if you've already placed an online order, it should be delivered as normal, and this is the message being posted on the store's websites and social media accounts. However, the administrators are currently reviewing all outstanding orders, so this can't be guaranteed.

Despite the official line from BHS being that trading continues as normal, a number of customers have raised concerns after the BHS customer service team informed them that their outstanding orders would not be delivered.

One customer contacted MSE saying: "I ordered a light in store and paid for it last Friday, before the news of the administration broke. I phoned BHS and they said that Yodel are refusing to deliver goods and that any out for delivery will be returned to the depot. I was also told that normally I would get a refund, but that the administrators are refusing all refunds."

MoneySavingExpert contacted Yodel, which denied this was the case. A spokesperson for the delivery company says: "Following the recent announcement that BHS has entered into administration, we have an agreement in place with the administrator to continue to fulfil outstanding deliveries".

Crucially though, BHS has also confirmed consumers' statutory rights aren't affected by the administration process. This means if you decide you don't want to risk waiting for your goods to arrive and you've ordered online or over the phone, you should be able to cancel the order under the Consumer Contracts Regulations (2013) and get the cost of the order refunded.

If you've had any problems receiving outstanding deliveries from BHS, contact news@moneysavingexpert.com.

What if I have a gift card?

Under insolvency law, when a retailer goes into administration, they don't have to honour gift cards or vouchers. Despite this, BHS has agreed to continuing accepting gift cards and vouchers.

But there's a big catch – BHS now says if you want to redeem a voucher you need to spend twice as much as the face value of the voucher. For example, if the voucher is worth £20, you'll need to spend £40 to use it and the remainder must be settled by cash, debit or credit card.

If the company were to cease trading in future and you still had an unspent gift card, you would be able to register as a creditor with the administrators. For more on this, see below.What happens if I want to return something I've bought in a BHS store?

BHS amended its returns policies after going into administration. Previously, the firm allowed customers to exchange or refund items within 45 days of purchase, either online or in store.

However, BHS says its policy now is that customers can't get a refund for anything purchased before 22 April 2016 – even if it's faulty. Though if you can provide proof of purchase you will be able to exchange a faulty or unwanted item for a replacement of the same value or less.

If you've bought an item from BHS from 22 April onwards, it says you will be able to get a refund if a product is faulty. All refunds require a store manager's authorisation. Unwanted goods bought from BHS on or after 22 April can only be exchanged for something of equal value or less.

There's some confusion though as again, BHS has told us that customers' statutory rights aren't affected. The picture with statutory rights becomes unclear when a firm goes into administration – but a Trading Standards spokesperson confirmed to us on Tuesday (26 April) that you should still be protected by consumer rights laws as long as companies continue to trade.

Under the Consumer Rights Act 2015, you've normally the right to reject a faulty item within 30 days and get a full refund in most cases (see our Consumer Rights guide for more). We've asked BHS to clarify how this fits in with its own policies and will update this story when we know more.

What if I want to return something I bought online?

A BHS spokesperson wasn't able to tell us what its policy now is for refunding customers who bought items online, or whether online customers can exchange goods purchased before 22 April in the same way customers who bought items in store can. We've asked for clarification and will update this story when we know more.

The spokesperson for BHS advised that even if you've bought something online, you should visit a BHS store to make refund and exchange requests.

Again, you should have some protection with your statutory rights here – the Consumer Contracts Regulations (2013), which give you 14 days to notify a retailer that you intend to return something and a further 14 days to actually return it, should still apply to online orders. For more info, see Web return rights.

What if I paid on a credit card?

If you paid for some or all of your purchase on a credit card, and it was worth over £100, you should be able to get your money back under Section 75 of the Consumer Credit Act if your items are faulty or don't arrive.

This means that whatever the rights you have with the retailer/company, you have with the credit card company too. It is a legal protection that credit card companies have no choice but to offer, and you can claim on this even if the credit card was used to pay for part of the goods.

It's worth noting though that the £100 minimum does not apply to the total bill, but to the individual items. This means that if your bill comes to £300, but the cost of your individual items are less than £100 then you won't be able to claim. See our Section 75 guide for more info.

If you paid with a Visa or Mastercard debit card for any amount, or Visa, Mastercard or Amex credit card for goods under £100, there's another step to try. It's called the chargeback system, where your bank gets cash back from the company's payment processing bank.

Unlike Section 75, this isn't a legal protection. It's designed so that if you pay for something, and that order isn't fulfilled or a mistake is made, your bank can do a chargeback from the bank that originally collected the payment. We've more info on this in the Chargeback guide.

What are my rights if BHS ceases trading in future?

This remains a hypothetical situation at this stage, but what typically happens is if a company is unable to deliver items or issue refunds, customers still have some rights and can apply to become creditors of a company.

This means that once all the company's large debts are paid off, as well as employees' wages, the rest of the money is divided up between customers who have registered as creditors.

To do this, you'd need to apply to the administrator. You may not get all your money back – if any – though, as priority will go to paying off the company's bigger debts.

BHS to file for administration: what it means for you

What will happen to BHS staff?

A BHS spokesperson says at the moment no staff redundancies have been made. However, the administration means that 11,000 jobs are at risk. If you're a BHS staff member and worried about your rights, check our Redundancy guide.

BHS has debts of more than £1.3 billion, including a pension fund deficit of £571 million. It sold to retail mogul Philip Green in 2000 for £200 million, but was then sold to a consortium called Retail Acquisitions last year for just £1.