House of Fraser online customers refused refunds despite earlier promise
House of Fraser customers have been told that they’ll get no refunds for goods ordered online but undelivered before the chain was bought last month.
New owner Sports Direct said people must “contact the administrators” to chase their cash. They will join a long queue of other creditors – meaning there’ll be little chance of getting their money back.
Mike Ashley’s Sports Direct agreed to buy the department store for £90m on 10 August hours after the 169-year-old chain went into administration when talks with its creditors failed to reach an agreement.
But on 15 August they took down the website, leaving online customers in the dark about their goods orders or their cash. After an outcry from customers, House of Fraser on 16 August said it would refund customers and also cancel all online orders.
Due to delays with delivering online orders, we have taken the decision to cancel and refund all orders that have not already been sent to customers. All customers affected will receive an email in the next couple of days. Please accept our apologies for any inconvenience caused.
But this week a spokesperson for House of Fraser told the BBC: “The comment made on social media on August 16 can by definition only relate to orders received by the current company.
“Any issues relating to purchases made prior to August 10 must be referred to, and dealt with, by the administrators at EY. We have spoken to EY, who accept that orders taken prior to August 10th must be dealt with by them.”
In other words, anyone who made an order before the takeover and owed money will be in a long line of creditors owed money.
That means it’s likely they will only get a small part of the money they are owed back.
EY said in a 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.”
The indications are that the administrators could take around a year to sort things out and that unsecured creditors could be offered a paltry amount, around a penny in the pound.
That would mean anyone who ordered, for example, £300-worth of goods could only expect to get £3 back, if anything.