Your legal obligation to gift voucher holders
Under the Consumer Rights Act 2015 and Consumer Protection from Unfair Trading Regulations 2008, gift vouchers are a pre-paid promise to supply goods or services. When a business closes, customers who hold unredeemed vouchers are unsecured creditors of the company. If the company can afford to refund them, it must — failure to do so may constitute an unfair commercial practice. If the company is insolvent, voucher holders rank alongside other unsecured creditors in the insolvency process.
How to notify customers about the closure
Give voucher holders as much notice as possible before the closure date. Publish a clear notice on your website, social media channels, and in-store. State the last date vouchers will be accepted or the process for claiming refunds. The more notice you give, the less exposure you face. A minimum of 30 days' notice is considered good practice, though there is no statutory minimum for voluntary closures.
How to issue refunds for unredeemed vouchers
Set up a clear refund process: publish an email address or postal address where customers can submit unredeemed vouchers for a cash refund. Accept digital and physical vouchers. Set a reasonable deadline — at least 30 days after the closure announcement — and honour all valid claims submitted before that deadline. Record every refund issued, including the voucher reference, amount, customer details, and payment method. These records will be needed if the company's accounts are queried.
What if the company cannot afford to refund all vouchers?
If the company is unable to meet its obligations to voucher holders because it is insolvent, voluntary strike-off is not the correct route. An insolvent company must use a formal insolvency process — creditors' voluntary liquidation (CVL) or administration. Attempting to dissolve an insolvent company via strike-off while leaving creditors (including voucher holders) unpaid can expose directors to personal liability for wrongful trading and may result in the strike-off being objected to by creditors.
Gift cards and pre-paid cards: a different treatment?
Some retailers issue gift cards that are e-money products regulated by the Financial Conduct Authority (FCA) rather than simple contractual vouchers. If your gift cards are FCA-regulated e-money, you have additional obligations — including safeguarding customer funds and notifying the FCA of your cessation. Check whether your gift card scheme was authorised or registered with the FCA, and seek legal advice if in doubt. Most small retail gift vouchers are not FCA-regulated, but check before assuming.