A business closed, but what happens to your vouchers?

A business closed, but what happens to your vouchers?

On Consumerwatch this week, Wendy Knowler focused on a Durban beauty spa which suddenly shut its doors having sold heaps of gift vouchers. They are now worth nothing. Or are they? 

Businesspeople Exchanging Visiting Card

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Paying for goods or services upfront always carries the risk that you won’t get what you paid for - airlines collapse or get grounded, online retailers don’t deliver, and gyms close down without warning when you still have a year or two to go on your contract.

The Riverside Spa in Durban North suddenly closed its doors last month, leaving many people with gift vouchers worth nothing.

And while it shares a property and a name with the Riverside Hotel, it is, as general manager Keith Bentley puts it, “completely divorced” from the hotel. It’s not listed among the hotel’s amenities. 

It was owned and run for the past two years by a woman called Louise Davies, who bought it from the previous spa owner.

And I’m pretty sure the association, or perceived association, with the hotel, elevated the spa’s status and appeal in the eyes of its clientele: that is until it suddenly shut its doors, and they couldn’t get hold of the owner.

That's one of the downsides of gift vouchers - the spa gets the money upfront, valid for three years, by law, but if the business closes, the consumer loses out.

In the month since the Riverside Spa closed its doors, I’ve heard from quite a few of those people with unclaimed gift vouchers.

Cheryl Lahee said her family often bought her vouchers for that spa for Mother’s Day and her birthday.  On July 4, when she called to make an appointment for a pedicure, she was told the Spa was closing that Monday, July 8.

“I then asked what was to happen to my unclaimed vouchers and was told by the receptionist that I would be refunded for them – about R720 worth,” she told me. But when she emailed Louise Davies, asking for a refund, and was told she could have product to that value instead. She insisted on a refund, but two emails later she got a response saying the email account had been closed.

Jacqueline Gringoire was given a R2,500 voucher for the Riverside Spa, but when she tried to make a booking recently, she was told the number no longer exists.

It was the same story with Paula Tavolari. Her husband gave her a voucher for Mother’s Day to the value of R880, but when she called to make an appointment on the 11th of July, she got no response.

“When I phoned the Riverside Hotel, I was told that they moved out on the Monday without any notice and without leaving a forwarding number or details,” she said.

“I saw on Facebook that many other people have vouchers from them as well, some of them bought them just days before the spa closed down.”

What can be done?

The magic word in Paula’s story was credit card - her husband had paid for her voucher with his credit card.

So I suggested that she tell him to approach the bank which issued his credit card and apply for chargeback. 
If he was within the cut-off period to do so, he’d get a refund based on the fact that he didn’t get what he paid for. 

It’s a protection offered by Visa and MasterCard globally via the issuing banks, and that’s the best reason to pay for stuff with a credit card - better than any reward they could offer you.

Good news - yesterday Paula emailed me to say that the money was refunded to her husband’s account.

So if you’re one of the many who are sitting with Riverside Spa vouchers you cannot redeem, ask whoever paid for them to apply to their bank for chargeback, if they paid with a credit card, that is.

Interestingly, those Riverside Spa vouchers were valid for three years, if only on paper, which is what is required by the Consumer Protection Act.

But an alarming number of spas and tattoo parlours still make their vouchers valid only for three months or six months, and respond with great surprise and disbelief when told that’s illegal.

So when buying a gift voucher for someone, it’s a good idea to pay by credit card, and always check that the validity period is at least three years. 

If you were gifted a voucher that’s valid for less than three years, contest it. 

And please tell me about it if the company won’t extend it and tells you after just three or six months that it has “expired”.

But do try to use a voucher as soon as possible - you get the most value out of it that way, and you reduce the chances of the spa or parlour closing down before you get around to it.

Also read: Is it still stealing if you didn’t mean to?

To contact Wendy, go to her Facebook page and click on the send email tab.

In case you missed any of the past Consumerwatch shows, find them below:

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