Fears are mounting over the future of Toys R Us as a rescue plan to save it from collapse is under threat - if you're part of its savings scheme or a gift card holder, here's what you need to know.

UPDATE THURSDAY 21 DECEMBER: Toys R Us has now agreed a rescue plan with creditors - this includes closing 26 of its 105 UK outlets, putting 800 jobs at risk.

It is understood the Pension Protection Fund will not back Toys R Us's planned restructure, which includes closing at least 26 shops, without assurances it will get a £9m payment to cover the staff pension scheme.

So far Toys R Us has said: "All our stores will remain open into the New Year which means there are no changes to our refund, gift card or Take Time To Pay agreements."

Martin Lewis
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I am saving for an item in the 'Take Time to Pay' scheme - what should I do?

Toys R Us's Take 'Time to Pay scheme' allows shoppers choose an item in store and pay for it over a four, eight or 12 week period, instead of paying in one go. You collect the item once you've made full payment.

But the scheme is not protected in the same way that your money would be in a UK-regulated bank.

If Toys R Us goes bust you would most likely lose that cash as you would have to join a long list of creditors - making it difficult to get your cash or goods.

If you use the scheme, pay for your item(s) in full in a store ASAP and collect it so it's in your hands in case the worst happens.

Last year, we warned in a blog about the scheme that if Toys R Us were to go bust, there's a risk you could lose your goods and cash.

I have a gift card - what should I do?

Insolvency law means it's perfectly legal for firms to stop accepting gift vouchers and cards if they go into administration. So there's very little you can do to redeem any credit you have if the worst happens.

What's more, Toys R Us states in its terms and conditions that it reserves the right to discontinue the gift card at any time, so as with most gift cards, there is little protection for your money.

Gift cards can't be exchanged for cash, so if you are worried, you can again avoid uncertainty by using them to buy items now.

What protection do I have if I'm shopping now?

Shopping in a store means you can take the items away with you immediately, whereas if you order online there will be a short period of uncertainty - if you're worried a retailer will go bust - while you wait for the items to be delivered.

Wherever you shop, though, there is some protection if you pay by card:

  • Item costing over £100 on a credit card – If you want to purchase a single item that is over £100, the easiest way to protect yourself is to make your purchase on credit card. That way you will usually be protected by Section 75 of the Consumer Credit Act 1974, which allows you to claim money from your credit card provider if you purchase a single item costing between £100 and 30,000 and the item is not supplied, e.g. if the firm goes bust. See our information on Section 75 guide.
  • Item worth less than £100 or bought on a debit card – If you have a problem you can try something called chargeback. This allows a card provider to reverse a payment to a retailer if it agrees you've got a legitimate complaint.
    It's important to know chargeback is part of Visa, Mastercard and Amex's internal rules and NOT a legal requirement unlike Section 75 - though we have seen many successes from MoneySavers who have used this in the past. See our Chargeback guide for more information.

Card protection could also be useful if an item develops a fault but the retailer you bought it from has gone bust.

Additional reporting by the Press Association

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