Dick Smith customers vent fury over refusal to honour gift cards as ACCC monitors the situation

Dick Smith customers have taken to social media to attack the retailer following the announcement it will not be honouring any outstanding gift cards just two weeks after Christmas.

Dick Smith’s receivers Ferrier Hodgson announced yesterday the company’s 393 stores in Australia and New Zealand would not be accepting gift vouchers or honouring customer deposits “due to the financial circumstances of the group”.

Dick Smith collapsed into voluntary administration yesterday, with McGrathNicol appointed to manage the administration. A syndicate of the company’s lenders subsequently appointed Ferrier Hodgson as receivers and managers.

The retailer has since been roasted online, with customers describing the external managers’ decision to not honour gift cards as “offensive” and “disgusting”.

“I think it is absolutely disgusting that Dick Smith stores were allowed to sell gift vouchers so close to Christmas when management would have had an idea of what was going to happen,” one person wrote.

“These things don’t happen overnight! We and many others have now lost money on vouchers as well as loved ones not getting their presents. I will never support your stores again.”

Another person went further, directing their anger at the company’s senior management.  

“They must have known before this was coming,” the customer wrote.

“I do not blame the staff and feel for them. My anger is squarely aimed at the top management. I find it offensive that the online website is still up and running and you can place orders that are likely to never be honoured.”

But are administrators or receivers within their rights to not accept gift cards?

According to Australian Competition and Consumer Commission, a customer may be eligible to become an unsecured creditor if a company has fallen into external administration and they have an outstanding gift card or voucher.

Customers that have paid deposits, including as part of a lay-by or interest-free offer, or have paid in full for goods that have not yet been received may also be considered an unsecured creditor of the company.

Dick Smith’s receivers yesterday said affected customers will become unsecured creditors of the company.

A spokesperson for the ACCC told SmartCompany the competition watchdog is aware of Dick Smith being placed into receivership and is monitoring the situation.

“The appointment of an external administrator and in this case, placing the company into receivership, can affect the position of consumers – for example those who hold gift cards or have paid a deposit,” the spokesperson said in a statement.

“Affected consumers should look to the information provided by the receiver and where appropriate consider whether they should seek to register as an unsecured creditor. There are some other useful suggestions in our website information, including looking to chargeback options that might be available for credit card purchases.”

The ACCC says it is working with other state and territory fair trading agencies in light of the Dick Smith receivership and “will be engaging with the receiver to monitor the approach to consumer issues”.