Customers of Jessops are being urged to spend gift vouchers as soon as possible after reports that the camera retailer is about to enter administration.
When other retailers have appointed administrators, they have often stopped accepting gift vouchers, or accepted them for a limited time only.
Jessops is on the verge of administration with PwC, the accountancy firm, poised to be appointed as administrator, Retail Week reported. It was thought the camera specialist could collapse into administration as early as today. The company has had a torrid time recently as it struggled with debts and the rise of camera phones.
Gift vouchers in denominations up to £500 were on sale on Jessops' website this afternoon.
When Comet went into administration in November (Xetra: A0Z24E - news) , Deloitte, the administrator, stopped accepting gift vouchers temporarily, although customers were able to spend them again two days later.
Gift vouchers are in effect a debt owed by the company. If the issuer goes bust, anyone with a voucher becomes an unsecured creditor, with a long and uncertain wait to get any money back. However, administrators have discretion to carry on accepting vouchers after a company has failed.
Customers with products that fail after the warranty has expired, who still have rights for up to six years under the Sale of Goods Act, can also expect problems if they seek redress from a company in administration.
If administrators sell all or part of a failed business, the new owner is a separate legal entity and is under no obligation to honour the obligations including vouchers issued by the original concern.
Jessops said a statement would be made in due course.
• What's your story? Email us at email@example.com