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Coles and Kogan offer exchange on Dick Smith cards

Dick Smith have announced that they are entering into receivership. Photo Inga Williams / The Queensland Times
Dick Smith have announced that they are entering into receivership. Photo Inga Williams / The Queensland Times Inga Williams

COLES has backflipped on an earlier decision and is now offering to exchange Dick Smith vouchers bought at Coles for a Coles gift card of equal value.

In a statement, the supermarket giant, "as a gesture of goodwill to our customers", stated it will replace any Dick Smith voucher bought at Coles between July 1 and the company going in to voluntary administration with a Coles gift card of the same value.

Online department store Kogan has also said in a blog post on its website that it will offer $25 of credit for use in its store if customers post their vouchers to them.

The Australian Securities and Investments Commission earlier released a statement providing advice for customers affected by the ongoing troubles faced by Dick Smith.

Dick Smith was placed into voluntary administration with McGrathNicol last week, with Ferrier Hodgson appointed as receivers.

"Due to the financial circumstances of the Group, unfortunately, outstanding gift vouchers cannot be honoured and deposits cannot be refunded," Ferrier Hodgson partner James Stewart said.

ASIC advises that customers who have bought a gift card or made a deposit on an item using a credit or eligible debit card may be able to get their money back from their card issuer via chargeback rights.

"You should contact your card issuer straight away as there are conditions and time limits on making a chargeback claim," the statement said.

Anyone who has bought a gift card or made a deposit with cash or using the cheque or savings option with a card should contact the voluntary administrators McGrathNicol about registering as an unsecured creditor.

When a company faces financial difficulty, it can be put in to receivership by secured creditors.

Secured creditors are those owed money by the company and have a legal claim over some of the company's assets that secured their debt owed.

In the receivership process, it's the responsibility of the receiver to collect and sell enough of the company's assets to repay the debt owed to the secured creditor.

The main duty receivers owe to unsecured creditors is to make sure the assets are sold for market value, and anything that remains after the secured creditors are paid is distributed to the unsecured creditors.

The fate of the 393 Dick Smith stores, along with over 3000 jobs, is still unknown.

Ferrier Hodgson has called for expressions of interest in selling the business as a going concern.

Topics:  coles, dick smith, editors picks

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