What if a gift experience company collapses?

Stonk

Those companies that sell vouchers entitling the holder to experiences at a later date (driving, hot air balloons, spa weekends, etc) - what is the position is the company goes our of business?

The way I understand it, when you do your experience, this takes place at an independent provider, who uses your voucher to claim the fee from the company. But if the company has collapsed, the provider knows full well they won't get paid, and will quite reasonably not provide.

It's a bit like "insurance-backed warranties". Are the vouchers "insurance-backed" in any way?

arcon5

I fairly certain there isn't a protection scheme in place. Although if you paid by CC you are protected. Debit cards you can file a chargeback -- but if they have hit the wall and therefore the bank is unable to recover the money from the retailers merchant account, i'm not sure what happens (although chargeback has a 120 day limit).

texranger

if the experience provider has been paid then they should accept the voucher, you would need to contact the provider to see if the experience has been paid for

arcon5

I imagine the experience provider wouldn't be paid until the voucher is redeemed. In the same way the likes of Groupon work, the end-customer supplies a code.

Stonk

arcon5 wrote: »

I imagine the experience provider wouldn't be paid until the voucher is redeemed. In the same way the likes of Groupon work, the end-customer supplies a code.

I think so too. Many of the experiences can be taken at one of several different locations/providers, so they couldn't know which provider to pay until the experience has been completed, or at least arranged.

Is there any time limit on credit card protection? Some/many/most(?) of the vouchers are valid for up to a year.

arcon5

Stonk wrote: »

I think so too. Many of the experiences can be taken at one of several different locations/providers, so they couldn't know which provider to pay until the experience has been completed, or at least arranged.

Is there any time limit on credit card protection? Some/many/most(?) of the vouchers are valid for up to a year.

No time limit is specified. Although I imagine they apply a policy of what is 'reasonable' -- for example, you'd struggle to persuade them to refund you for a pair of sockets 2 years prior.

texranger

arcon5 wrote: »

I imagine the experience provider wouldn't be paid until the voucher is redeemed. In the same way the likes of Groupon work, the end-customer supplies a code.

no the retailer purchases say 30 experience events and pay for these upfront and are given 30 vouchers for these days that will have an expiry date to them, they then sell these vouchers at a profit.

hcb42

that's not my understanding, they couldnt be agreed up front as there are multiple channels of sale for the end provider, and indeed multiple providers for one voucher.

texranger

hcb42 wrote: »

that's not my understanding, they couldnt be agreed up front as there are multiple channels of sale for the end provider, and indeed multiple providers for one voucher.

No this is how it works

you have an experience day provider ( lets say paintball)

As as retailer you purchase say 30 paintball vouchers from them at say £20 per voucher. so you pay then £600 for the vouchers

you then list these on your site or in your shop say at £40. a customer purchases one of these for £40 and then the customer call the experience centre to arrange a date to use the voucher.

it is as simple as that

hcb42

so how does that work e.g. in hotels then i.e. I want to buy an afternoon tea voucher at a 4 star hotel and 30 hotels are listed?

Seems like they would have a massive cash flow problem if they have to pay out first....

arcon5

texranger wrote: »

no the retailer purchases say 30 experience events and pay for these upfront and are given 30 vouchers for these days that will have an expiry date to them, they then sell these vouchers at a profit.

I doubt it.

They will likely guarantee X qty within Y timeframe at Z price. Then use the voucher code to get the money once all the vouchers are redeemed.

Paying upfront would be a cashflow killer, hence why most retailers have credit facilities with suppliers.