Retailer Dick Smith has been placed in receivership, and the receivers have announced that holders of gift cards are now unsecured creditors. You may be able to get your money back, however.
“Stuck for a last minute gift idea? Gift cards are a great way to say thank you, happy birthday or congratulations.”
That was the message recently according to the Dick Smith website – but those who purchased Dick Smith gift cards as a Christmas present this year may be feeling mighty unhappy right now if it hasn’t yet been spent. Receivers for Dick Smith, Ferrier Hodgson, announced that due to the “financial circumstances” of the company, “unfortunately” outstanding gift vouchers would not be honoured and deposits not refunded.
Receiver and Partner at Ferrier Hodgson, Mr James Stewart, said it was too early to clearly identify the primary causes of the company’s current financial position and the reasons for its decline other than saying the business had become cash constrained in recent times. He said it would be business as usual while the Receivers look at the restructuring and realisation opportunities for the Group. The DSH group operates 393 stores across Australia and New Zealand under four brands, Dick Smith, Electronics powered by Dick Smith, Move and Move by Dick Smith.
“Dick Smith is one of the best known brands associated with consumer electronics in Australia and New Zealand,” Mr Stewart said. “We are immediately calling for expressions of interest for a sale of the business as a going concern.”
The group has 3,300 employees and annual sales of approximately $1.3 billion.
Can you get your Dick Smith gift card money back from Dick Smith?
Unfortunately, outstanding gift vouchers cannot be honoured and deposits cannot be refunded. Dick Smith refunds are not an option unless affected customers apply to become unsecured creditors of the Group, which means they stand in line behind all other creditors to get their money back.
What if you bought your gift card with a credit card or debit card?
If you bought the gift card via your credit card or potentially debit card (if you pressed credit), then you may be able to get the money back from your bank, through a process known as chargeback. This is because both Visa and MasterCard have consumer protection on purchases when merchants don’t deliver goods. In this case, a gift card not being honoured would equate to goods not being delivered.
PayPal has a similar customer protection and enables you to dispute a transaction if the goods are not delivered.
Unfortunately, this type of protection does not apply via EFTPOS or via cash, and in this case people will have to register as unsecured creditors and stand in line.
What if you bought your gift card at the supermarket?
In good news for shoppers, Coles and Woolworths have both announced that they are prepared to exchange Dick Smith gift cards that were purchased at its supermarkets with a Coles/Woolworths gift card prior to the retailer going into administration.
“While Coles has already passed on the sale proceeds of the gift cards to Dick Smith Electronics, as a gesture of goodwill to our customers, we will exchange valid, unredeemed Dick Smith Electronics gift cards purchased at Coles from July 1, 2015 for Coles gift cards of equal value,” said the company.
Woolworths has followed suit, with a spokesperson saying, “Customers who have purchased Dick Smith gift cards from Woolworths Supermarkets or BIG W stores will be able to exchange the unredeemed value on their cards for Woolworths’ WISH gift cards, which can be used at participating stores across the Woolworths group, including all Woolworths Supermarkets, BIG W, Thomas Dux, Dan Murphy’s, BWS, Masters and Caltex Woolworths stores.”