Grocer to offer reimbursement
Sainsbury's has pledged to come to the rescue of tens of thousands of Farepak customers after the Christmas savings club collapsed without compensation last month.

Some of those affected lost thousands of pounds that they had saved in vouchers to spend at Christmas.

The supermarket group is understood to be close to a deal with the administrator BDO Hayward, which would involve Farepak customers who had opted for Sainsbury's vouchers receiving 25 per cent of the value of their savings. It would need the help of Farepak agents who sold to family, friends and neighbours, and hold customer details, to be successful.

Sainsbury's customer director Gwyn Burr said: 'The administrator has indicated that, barring unforeseen problems, it will be able to provide us with details of all Farepak agents who had customers.'

Sainsbury's hopes to dispatch the vouchers by the beginning of next month. It will rely on agents to distribute some vouchers.

Following a House of Commons debate on Farepak's collapse, minister for consumer affairs Ian McCartney said a Farepak Response Fund was being established with help from UK charity Family Fund.

McCartney described Farepak's collapse as a 'national emergency'. He encouraged MPs to donate a day's pay to the fund. The Department of Trade & Industry has launched an investigation into what prompted the fiasco.

Pledgers of support for the Farepak fund:

· Tesco has pledged£250,000 and called on other companies to do the same;

· M&S has been willing to make a contribution for a number of weeks, but there has been no means of doing so. We are delighted that a workable solution now seems to have been found and we are pleased to make a donation of£250,000 to the DTI's Farepak Response Fund to help the families involved;

· Home shopping firm Findel will also be offering significant financial support - of at least£100,000 - to be ratified by the board within the next few days;

· M&S boss Stuart Rose said he would consider making a contribution;

· Gift voucher company Park Group will contribute£1 million.