Missguided shoppers will not get refunds for returnson June 14, 2022 at 11:01 pm

Missguided shoppers, left out-of-pocket after the fashion brand failed, won’t get their money back say the administrators winding up the company.

Teneo, which is running the business until new owner Fraser Group takes over, said the company won’t be able to honour refunds to customers.

It means shoppers like Steph Eady, who sent back £190 of clothes, are left to claim through their credit card.

When a firm goes bust, customers are often last on the list for repayments.

“I was looking for a dress for a friend’s wedding so I naturally ordered lots of options to try on,” Mrs Eady said.

She returned seven items, but didn’t receive her money back.

“I messaged Missguided on Twitter and they told me it was delayed by a technical issue but I would get it.

“Now I’ve had an email basically saying, ‘You’re not going to get your refund,'” she said.

Manchester-based Missguided and its menswear brand Mennace went under in May, after its suppliers filed to shut it down over unpaid debts.

Pandemic lockdowns initially sent internet shopping sales soaring, boosting brands like Missguided that do most of their business online. However, rising prices have prompted shoppers to cut back, and costs, especially for transport, have put additional pressure on businesses.

Competition is fierce for Missguided’s 18 to 34-year-old target customers with rivals like Boohoo, PrettyLittleThing and Shein dominating the market.

Two days after their collapse, Missguided and Mennace were bought by Frasers Group, which owns Sports Direct and House of Fraser for £20m. The new owner is expected to take over from Teneo in August. In the meantime the website has stopped taking orders and customers are left chasing orders, returns and refunds.

“When you hear they’ve found a buyer you think it’ll be business as usual and you won’t have any trouble getting your money back – but that’s not the case,” said Mrs Eady.

Other customers received the same email that Mrs Eady had from Teneo which said the “best option” was to make a claim via their credit card or buy-now-pay-later provider.

It said: “As the companies are insolvent there is a possibility that there will be no return to creditors from the administrations at all.”

Although Teneo declined to comment directly to the BBC, the email said Missguided and Mennace have debts that “far exceed” the value of their assets. Teneo also would not say how many customers were likely to be affected.

Source: Which?

Many individual customers will end up as “victims of the company’s collapse”, warned Julie Palmer, partner at insolvency firm at Begbies Traynor.

But there is a glimmer of hope for some shoppers, if they work quickly to try other ways to claw back the money they spent, she said.

Some shoppers who paid by debit card have already reported successful refunds through chargeback – a voluntary scheme that Visa, Mastercard and Amex signed up to.

Buy-now-pay-later brands Klarna, ClearPay and Paypal all told the BBC they would support their customers in getting their money back through their disputes process.

Customers who have items at home still that they were planning to return, should not send them back, said the email from Teneo, since refunds would not be honoured. However, it said it was still working to fulfil outstanding orders where possible.

Teneo’s email said: “Any money that is left over after the assets are sold may be able to be paid back to creditors, for example customers, suppliers and employees.”

However, that process could take months to complete and money owed to suppliers, such as the firms that make clothes for Missguided, would take precedence over money owed to customers.

Even Missguided customers who had already been told they would receive a refund from the company should not expect to get one now, the email from Teneo said. Items already returned would not be refunded, and neither would orders that were placed before administrators came in on 30 May, it said.

While some customers may be able to reclaim money through credit cards and other payment providers, the anger and disappointment is likely to have damaged the Missguided brand that the Fraser Group has bought.

“They had a very loyal customer base,” said Mrs Eady. “It felt like a community of like-minded people.” But that trust has vanished, she said.

“It’s not just affected immediate customers, you’re going to tell all your friends.”

Annelie Helgelin, from digital consumer intelligence company Brandwatch, said Missguided had been heavily criticised on social media.

Negative mentions on Twitter were up by 1,451% and positive posts down by 30% since 26 May when it was on the verge of collapse, with a lot of the “angry mentions” from customers frustrated over missing refunds and deliveries.

“It can be challenging for a brand to reclaim its loyal following after an incident like this, where many customers feel let down,” she said.

“However, we cannot spot a significant number of conversations around a boycott, which suggest that these consumers might return once the brand has sorted its issues out.”

On Tuesday, Frasers’ boss Michael Murray announced Missguided’s founder Nitin Passi would join the group as chief executive of Missguided. He had stepped down from the same role in April.

Mr Passi said: “I am acutely aware of the impact Missguided’s administration has had on our stakeholders and I am committed to rebuilding their trust”.