COLES has agreed to exchange Dick Smith gift cards bought from its supermarkets, in a major win for those left out of pocket by the electronic retailer’s collapse.
Announced this morning, the “gesture of goodwill” will mean many of the gift cards given as Christmas presents, some running into the thousands of dollars, will no longer be worthless.
The supermarket giant has also written to Dick Smith’s administrator urging it to honour outstanding gift cards.
It comes after furious customers blasted Coles and Woolworths for selling the gift cards, including those with a 10 per cent bonus offer, while Dick Smith was in financial strife.
The electronics retailer called in administrator McGrath Nicol on Tuesday, and its lenders appointed receiver Ferrier Hodgson.
Ferrier Hodgson announced that it would not be honouring gift cards or deposits, prompting a public outcry.
Those left out of pocket included James Briggs, a PhD student from Melbourne whose dying grandfather bought him a $1200 Dick Smith gift card to buy a computer for his studies.
News.com.au reader Tony Smith slammed Coles on Tuesday for selling him hundreds of dollars worth of Dick Smith gift cards while the retailer’s fortunes crumbled.
While Coles maintained that it could not have predicted the retailer’s receivership — emphasising that it had already passed on the gift card funds to Dick Smith — it appears to have caved under the weight of public pressure.
This morning’s announcement could hit the supermarket chain’s bottom line if it is unable to recoup the value of gift cards it sold, which could well run into the millions of dollars.
Those who bought gift cards directly from Dick Smith, or from other retailers like Woolworths and Big W, have not been so lucky.
Unless Ferrier Hodgson changes its mind, they will have to register as unsecured creditors and hope that there’s enough cash to pay them once the banks have recouped what they are owed.
Other businesses to offer refunds include app start-up Prezzee, which quickly promised those who bought a Dick Smith gift card on its platform that they could claim its value against a gift card from one of its other partners, such as Myer.
Online retailer Kogan is offering a $25 voucher for each Dick Smith gift card, but will not value match and its offer is limited to one per customer.
Dick Smith has disabled visitor comments to its Facebook page, which in recent days has been subject to a deluge of angry posts along with messages from those keen to cash in on the situation. Some have offered to buy up Dick Smith gift cards and “try my luck as an unsecured creditor”.
Many customers were outraged that Ferrier Hodgson was continuing to operate Dick Smith stores while refusing to honour gift cards and deposits, essentially selling goods while refusing to hand over those that had “already been paid for”.
Shoppers left in a similar position by the Borders bookstore chain’s collapse were still fighting for refunds four years later, the Wall Street Journal reports.
When Borders filed for bankruptcy in February 2011, it left behind 17.7 million useless gift cards worth more than $200 million.
Meanwhile, the ACCC is monitoring Dick Smith’s receivership and how it will hit customers.
Unredeemed Dick Smith gift cards bought at Coles from July 1 last year can be exchanged, with proof of purchase, by filling out a redemption form, available online or by calling 1800 061 562, by February 29.