Neon Beach, an online retailer selling made-to-order neon signs, left customers waiting months for their orders before falling into administration in March 2021.
Which? spoke to scores of aggrieved customers who had joined a Neon Beach Facebook support group with more than 250 members.
They told us how they’d been left in the dark about their signs after the retailer, who collaborated with ITV’s Love Island on an exclusive collaboration in 2020, ran into difficulties with its UK-based supplier.
This led to a huge backlog of orders which meant Neon Beach couldn’t produce around 4,000 signs in the five to six week timeframe given on its website, or give a new estimated time of arrival.
Despite this, it continued to advertise on social media and initially told customers it wouldn’t issue refunds due to signs being handmade to order.
Later Neon Beach told Which? it would in fact offer refunds to customers who had experienced delays.
But another plot twist ensued in March when it came to light that the troubled retailer had in fact fallen into administration, leaving many customers still out of pocket.
Customers have limited consumer rights when a company goes bust. If the company is bought out, the new owners aren’t obliged to fulfil or offer refunds for orders placed under the previous ownership.
The new owner, Wayflyer UK, has however told us they’ll be offering customers with outstanding orders the option to receive their signs or a full refund.
Here, we shine a light on the Neon Beach customers who were left out of pocket for months and explain your rights when a retailer goes bust.
‘I wanted a refund, not a gift voucher’
Before Neon Beach fell into administration, it left some customers waiting months for orders, despite its website stating production would take a maximum of five to six weeks.
Pennie and her partner ordered a sign from Neon Beach in September 2020 for their wedding in December, spending £250 in total.
‘An ad for Neon Beach came up on my Facebook,’ Pennie told us. ‘I’d been looking for a sign for a while and they were doing a special offer so we thought we’d go for it.’
After six weeks, Pennie still hadn’t received her sign and contacted Neon Beach who told her the sign was now being produced by an international production facility.
It said it was unable to provide a date for when the sign would arrive.
In December, with only weeks to go until their wedding was supposed to take place, and having waited three months for the sign, they requested a full refund.
Neon Beach told the couple that ‘all sales are final once placed on the website’ due to signs being handmade to order. It then admitted to a massive backlog of orders due to issues with its supplier.
But instead of issuing a refund, Neon Beach offered a gift card equivalent to the amount the couple had paid.
‘I replied saying I want a refund, not a gift voucher, but its customer service team said it wouldn’t be able to,’ Pennie explained.
Retailers don’t have to offer refunds for personalised or made-to-order items. But if the retailer breaches the contract with the customer, by sending a faulty or not-as-described item or not delivering in a reasonable timeframe, customers are entitled to their money back.
In lieu of a refund from Neon Beach, Pennie tried to make a chargeback claim with her bank, having paid with her debit card. Unfortunately, the 120-day window for making a claim had long passed and her claim was rejected.
Pennie has since been contacted by the new owners of Neon Beach who have said they will produce and ship her sign.
‘They kept stringing me along’
Stephen Petri ordered two signs for his new wedding prop hire business in July 2020.
Your rights are slightly different when you order something as a business customer, rather than an ordinary consumer, but you are still usually entitled to expect items to be delivered in an agreed or reasonable timeframe.
In October, three months after he’d paid for his lights, he asked for a refund but was told his order couldn’t be cancelled and that he wouldn’t be refunded.
Neon Beach repeatedly told Stephen he would eventually get the sign, but couldn’t give him a specific date.
‘They kept stringing me along, I gave them the benefit of doubt for a long time,’ he explained.
Like Pennie, Stephen paid with his debit card and left it too late to make a successful chargeback claim.
Despite his bank rejecting the claim, Stephen was told by Neon Beach that they can’t resume production of his sign or issue a refund because the payment dispute was still open.
‘It shouldn’t be up to the customer to chase the refund,’ Stephen said. ‘If the business hasn’t produced what they say they’re going to in a reasonable timeframe, they should automatically give you your money back.’
Before it collapsed, Neon Beach told us that 90% of orders placed since it launched were fulfilled within six weeks.
It told us it would offer refunds to those who had experienced delays, but both Pennie and Stephen were yet to receive any offer of reimbursement when the company fell into administration in March.
‘The Love Island branding was so glossy and professional’
Pennie and a number of other customers we spoke to came across Neon Beach after seeing their ads on Facebook and Instagram.
During the autumn of 2020, Neon Beach also posted about its collection in collaboration with ITV’s Love Island, which caught the eyes of many customers we spoke to.
‘’The posts are so glossy and professional, the ads with the Love Island branding looked so good,’ said Pennie.
Pennie, who is still ‘bombarded with Neon Beach ads’, told us she left negative comments, which she noticed were repeatedly removed or ‘hidden’ from the retailer’s Facebook posts.
We asked Facebook, who also owns Instagram, whether it monitors this type of activity on paid-for ads on its platforms, but it didn’t respond to our question directly.
Facebook and Instagram do have ad policies that companies must adhere to, and you can report posts if you believe an advertising retailer has engaged in unscrupulous business practices.
ITV told us: ‘Neon Beach was a supplier for Love Island season two in the U., and also made available select Love Island-inspired lighting that was for sale last autumn on the Neon Beach website. That project is completed and ITV is no longer working with Neon Beach.’
‘It really puts me off shopping small’
Ayla, who paid for her light using ‘buy now, pay later’ (BNPL) scheme Klarna, had to make a claim with Klarna to get a refund after her light didn’t arrive in time for Christmas.
The experience has made her question whether she can trust small retailers she sees advertising online.
‘I’m very much for supporting small businesses but this really does put me off,’ she said. ‘I’d rather go to a big company where at least I know if I have a complaint they will deal with it in a more appropriate way.’
If you’re unsure about a retailer you’ve seen advertising online, make sure to follow our tips below before placing an order.
Tips for shopping safely online
- Check reviews – don’t take the overall rating at face value, read some reviews. If you see large volumes of five-star reviews, ask yourself how likely it is that so many people found a product or service faultless? Also check the negative reviews, to see if buyers had common issues.
- Watch out for scams – we advise extreme caution if you see any deals advertised on marketplaces and social media that look too good to be true. If you’re buying from a seller on an online marketplace such as Amazon or eBay, it’s worth having a quick look at their profile. Warning signs to watch out for include foreign seller locations, strange business names and a lack of contact details.
- Don’t risk buying a fake product – one easy way to ensure you’re buying a safe product is to purchase directly from brands you’re familiar with or from retailers you trust. If you’re buying a brand you haven’t heard of, do even more research than usual to make sure it’s safe.
- Know your rights – you have clear legal protections when you’re shopping online, and we can help you understand what these are. Find out more about your online shopping rights.
- Find out more: our tips for staying safe and shopping smart online
New Neon Beach owners give the green light for refunds
Neon Beach was bought out of administration by Wayflyer UK.
When a company buys another company in this way, the new owners buy all the rights to their branding, website and social media. But the company, under new ownership, is technically a new legal entity.
This means the new owners are not legally obliged to honour refunds, gift cards or outstanding orders placed under the previous ownership.
Despite this, Wayflyer has confirmed it will offer customers with outstanding orders the choice to have their order fulfilled or receive a full refund.
It told us it’s proactively contacted customers that have been waiting over three months for their orders.
Any customers who haven’t yet been contacted can email the dedicated customer service email at help@neonbeach.com so it can help on a case-by-case basis.
Wayflyer has also changed Neon Beach’s manufacturing partner since acquiring the business.
It said the new manufacturer has an experienced track record of product delivery which means the estimated five to six week production timeline is now accurate.
Gift cards bought under the previous ownership will also continue to be honoured.
If you’re still waiting on a sign or refund from Neon Beach, contact the help@neonbeach.com email address.
Your rights when a company goes bust
When a company goes bust, the administrators might decide to stop honouring gift cards, refunds or outstanding orders. They can also decide to stop accepting chargeback claims.
If you do shop with a company that ends up going bust, here’s what you can do:
- If you paid by credit card and spent more than £100, you can make a claim with your credit provider under Section 75 of the Consumer Credit Act.
- You attempt to make a chargeback claim with your bank if you paid by debit card, although the administrators might decide to not accept these claims.
- You can make a claim in writing to the administrator explaining what you’re owed and what for.
- If you’re holding on to gift cards, make sure you spend them swiftly if they’re still being accepted – the administrators or new owners might decide to stop accepting them.
- Read more: What to do if a company goes into administration
Get in touch – share your consumer rights problem with us at yourstory@which.co.uk
source https://www.which.co.uk/news/2021/04/neon-beach-leaves-customers-in-the-dark-about-made-to-order-lights/