Consider the cost of ‘going out of business’ bargains

This announcement is for: 

With Commissioner for Consumer Protection David Hillyard 

In the past few weeks, several major retailers have announced closures and subsequent closing down sales.

Many of us find the promise of major sale savings too tempting to pass up, and while they can be a great opportunity to bag a bargain, it’s important to consider what it means when it comes to warranties and guarantees, or your return, replacement or refund rights. 

During a voluntary administration and/or receivership period, some companies continue trading while others immediately start winding up.

If a business you’ve paid money to goes under, you may be at risk of losing money if you have: 

  • paid in full for goods or services to be collected or delivered later;
  • paid a deposit, such as through lay-by or an interest-free offer;
  • bought a gift card or voucher; or
  • returned a product and been issued a credit note.

You may still receive goods or services you have paid for if the company continues to trade – but you may not be able to redeem gift cards, vouchers or credit notes. After a company enters administration or goes into liquidation, you can usually no longer commence or continue legal action against it.

Your options include:

  1. Request a chargeback

If you paid with a credit card, contact your bank and request a ‘chargeback’ as soon as possible, as there are usually time limits to do this. This effectively reverses the credit card charge and is similar to a refund. A chargeback can take up to one year to be finalised.

  1. Register as an unsecured creditor

If you did not pay with a credit card (or while you are waiting for a chargeback to be processed) you can register with the administrator or liquidator as an unsecured creditor. The insolvency process will determine whether you receive the goods, a partial or full refund – or maybe even nothing.

A company in voluntary administration may still allow you to use gift cards but place conditions on their redemption. For example, if you have a $100 gift card, you may be required to spend an additional $100 to redeem it. Sometimes that sits uncomfortably with consumers, but it is lawful for administrators to impose such conditions to ensure the ongoing viability of the business.

You should also remember that if you bought a faulty product from a store that has since closed, you still have options for a remedy. Depending on the product and the type of problem, you can go straight to the manufacturer or you may wish to approach the retailer for a remedy if they are operating during administration. 

Further, if a business continues to sell a product during administration, they are liable for and must honour future claims under the ACL.

For more information about voluntary administration, visit the Australian Securities and Investments Commission website (

You can also contact Consumer Protection on 1300 30 40 54 or via email at

Consumer Protection
Media release
24 May 2019

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