Irish

Wednesday 20 August 2014

Video: Pressure mounts to change law after HMV rejects gift vouchers

Paul Melia and Louise Hogan

Published 16/01/2013 | 05:00

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PRESSURE is mounting on the Government to change the law so consumers who purchase gift vouchers are not left out of pocket when a company refuses to accept them.

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It comes after music and entertainment retailer HMV refused to honour gift tokens bought in recent weeks, leaving hundreds of people nursing hefty losses.

The future of 300 jobs is in the balance after it went into administration in the UK.

Deloitte is understood to be seeking buyers for the firm, which has 16 stores in the Republic and 10 in the North.

The music, film and games retailer entered administration late on Monday after warning prior to Christmas that its future was uncertain.

Shares were suspended on the London Stock Exchange, and workers will have to wait and see if their jobs are safe.

A spokeswoman for the Department of Jobs, Enterprise and Innovation last night said its "number one" concern was jobs and it had noted the comments of HMV chief executive Trevor Moore who was confident the firm could survive in some form.

The Department confirmed there were currently "no plans" to alter company law which ranks the order in which creditors may access a firm's assets if it is declared insolvent.

"Holders of gift vouchers are unsecured creditors, and rank after other creditors such as the Revenue and employees," the Department stated. "The view of the Department is that this priority accorded to taxpayers and employees is correct, and as such there are no plans currently to alter this ranking."

However, consumers who purchase vouchers using credit cards for companies that later go out of business may be able to recover the amount spent through their bank.

The move by HMV came after the fall in sales of CDs and DVDs, many of which are now bought online. In a shock move the administrators at the 92-year-old firm decided that vouchers and gift cards would not be accepted in stores.

Customers expressed fury yesterday. Dozens of them flocked to shops in Dublin in a desperate attempt to cash in the vouchers bought as gifts.

They included director of the Gaiety School of Acting, Patrick Sutton, who said he had planned to use his tokens valued at €88 to buy box sets of ' Breaking Bad' and ' Curb Your Enthusiasm'.

"It's a shame. I should have spent my voucher when I got it."

The National Consumer Agency said it was "disappointed" at HMV's action.

"This decision is very disappointing in light of the fact that the company continued selling vouchers right through the busy Christmas period and consumers bought them in the expectation that they could be redeemed," it said.

" The NCA will be pushing for the administrator to reverse this decision not to redeem or refund these vouchers or at the very least, to give HMV customers in Ireland more clarity about whether this position could change in the future."

Fianna Fail Enterprise spokesperson Dara Calleary said the Government needed to strengthen legislation to give gift vouchers the same status as cash for retail purchases.

Consumer groups have advised people who paid with Visa or Mastercard credit or debit cards to contact their card issuer to see if they can get a refund through the Visa or MasterCard chargeback process, on the basis that the service paid for was not rendered.

Those who paid in cash should hold on to the vouchers in case a claim can be made against the administrator in the future.

David Mcwilliams

Irish Independent

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