The decision by HMV not to honour gift vouchers as extremely disappointing, and I think it is likely that the move will damage consumer confidence. I am disappointed that they continued to sell these vouchers until yesterday evening, given that on Dec 13th it said, according to Bloomberg, “it probably won’t comply with agreements on its borrowings in January and April, adding that full-year results are unlikely to meet expectations”, and as such there could have been advance warning given.
One key thing to note is that, if you have bought the vouchers on a credit card, you could possibly ask for a chargeback from your credit card issuer.
First and foremost, all energies must be focused on finding a buyer for HMV and saving as many jobs as possible. I understand that the administrators intend to continue trading while they seek a purchaser, and as a result I think it is entirely unacceptable that the chain is refusing to honour gift vouchers, paid for in full by their customers.
HMV continued to sell these vouchers up until yesterday evening, while their press releases were being written and while they made preparations to enter administration. The idea that they took cash for vouchers, which hours later would be valueless is dishonest and unfair.
Behaviour of this kind undermines consumer confidence at a time when we are trying to encourage those who can afford to do so, to get out and spend. Countless people across the country will have bought gift vouchers before Christmas in good faith; now HMV is trying to leave them with absolutely nothing to show for their money.
This is a terrible way to treat your customers. Even if a new buyer is found for the business, it is likely that they will not honour these gift vouchers either. There is always collateral damage when a major business goes bust. But I find it particularly disturbing that HMV continued to sell vouchers just hours before announcing it is facing closure. The firm should account for its actions.
As has been rightly pointed out by the Telegraph in the UK: “Gift vouchers are in effect a debt owed by the company. If the issuer goes bust, anyone with a voucher becomes an unsecured creditor, with a long and uncertain wait to get any money back. However, administrators have discretion to carry on accepting vouchers after a company has failed.”
I am very concerned for the 300 jobs that are now at risk, and I hope that at least some of the outlets can be saved. In many towns, HMV is the last remaining bricks and mortar music shop, and it would be tremendously sad if they were all forced to close. HMV’s behaviour in the last 24 hours will do nothing to help the struggling sector.