Single crystals of the type-I clathrate Ba₈Ni_3.5Ge_42.1□_0.4 (space group Pmn, no. 223, a = 10.798(2) Å, l = 30 mm, ∅ = 8 mm) were grown from the melt using the Bridgman technique. Their composition, determined by microprobe analysis, reveals a distinctly lower Ni content than previously reported for the lower limit (x = 5.4) of the homogeneity range of the clathrate-I phase Ba₈Ni_xGe_46−x. From single crystal X-ray diffraction data we introduce a crystal structure model that takes point defects (vacancies) □ in the Ge network into account. It reveals that both Ni and □ accumulate at a single site (6c) and that, as a consequence, the Ge network distorts considerably. Ba₈Ni_3.5Ge_42.1□_0.4 shows metal-like behaviour (dρ/dT > 0) albeit with high resistivity at room temperature (ρ(300 K) ≈ 1 mΩ cm). Together with the low charge carrier concentration of 2.3 e⁻/unit cell at 300 K this is typical of a degenerate semiconductor. The lattice thermal conductivity is distinctly smaller than that of Ba₈Ge₄₃□₃, where the vacancies partially order, and smaller than those of Ba–Ni–Ge type-I clathrates without vacancies, suggesting that disordered vacancies efficiently scatter heat-transporting phonons. We provide evidence that the maximum value of the thermoelectric figure of merit reached in Ba₈Ni_3.5Ge_42.1□_0.4, ZT(680 K) ≅ 0.21, can be further improved by adjusting the charge carrier concentration.