Unauthorised Use of Discount Code

Question

TL;DR Can a retailer back out of their own Terms and Conditions because I used a discount code that I did not have explicit authorisation to use?

Full Details I found a discount code online for a gift card provider. With this particular gift card, one can send it off to the provider to 'redeem the balance', minus a fee. This allowed me to buy the cards and return them and get back more than I paid. (For example, suppose you get 20% off a £100 card, ie £20 reduction, and the redemption fee is £10. You make a profit of £10.)

When I made the purchase, I entered the discount code, and it was accepted. I then ticked the Terms and Conditions box---the Ts and Cs make no reference to discount codes (but do say that I can redeem the money for the fee). Upon my attempted redemption, the provider said that they would not be proceeding with the redemption, but rather refunding what I paid originally; their argument is that I didn't have authorisation to use that discount code, and that it was intended for a specific company (to which I have no connections), and that this discount code came with additional Ts and Cs, which include not passing the code onto a third party and that all cards are sold on a non-return basis. (The code was readily available on multiple voucher websites.)

I responded that I had not agreed to any of these Ts and Cs, but rather the ones I had agreed to made no reference to exceptions to the redemption clause (and no reference at all to discount codes).

They have now replied with the following statement.

Pending further legal advice we will be making a full refund [as you requested] to you less any card charges as this matter is dragging on.

We must make you aware however that we may be contacting you soon regarding the refund should our legal advisors advise us to do so. This may include contacting the police for the unauthorised use of a Corporate Discount Code.

We would advise that you refrain, in the future, from using Discount Codes not received directly from ourselves as you are now aware that they are not designed for the use of an individual for profit.

I had no knowledge that it was a corporate code, and were that the case my order should have been declined. Is the comment about "contacting the police for the unauthorised use of a Corporate Discount Code" just trying to scare me, or legally am I at fault?

If necessary I can provide the name of the company and a link to their Ts and Cs, but I would rather keep it anonymous if possible

Answer 1

If you were to seek legal recourse for breach of contract (their Terms and Conditions), the best outcome you could hope for would be "making whole", and since they have already offered this a court could award you what the retailer already offered, but make legal costs on both sides the plaintiff's liability (ie. you), since you could have taken the offer and avoided court.

The Terms and Conditions associated with the discount code mean that you won't be able to return the gift cards for cash. It will be argued that by using the code, you agreed to those terms and conditions.

The second paragraph of their reply looks like an attempt to scare you, but it has legal merit. By using the unauthorised code you could be considered to have made false representation when you entered into the contract. This could render the contract void, and if they could demonstrate it had been done deliberately to gain money it could meet the threshold for fraud (which is what the police would possibly investigate : if it can be shown that you were aware the discount code didn't apply to you it would constitute making "a false representation ... to make a gain for himself" [sub-paragraphs 1-5, paragraph 2 of the Fraud Act 2006]).

You may be able to argue that the voucher websites misled you (though it sounds like you, I and the retailer already know that's not true), but since the retailer has offered to repay what you paid there are unlikely to be any damages - and, unless the voucher site took commission from your transaction, a contract between you and the voucher sites would be difficult (possibly impossible) to establish.

In the circumstances, returning what you originally paid is a good offer.