Coles has agreed to exchange Dick Smith gift cards for equal value

PEOPLE power has won the day in the Dick Smith gift card debacle, with both major supermarkets agreeing to compensate those who got burned.

WOOLWORTHS has finally agreed to exchange the now worthless Dick Smith gift cards it sold in the lead-up to the retailer’s collapse, in a triumph of people power.

The supermarket giant followed the lead of its main competitor, Coles, which this morning promised to swap Dick Smith gift cards bought in its stores for a voucher of equal value.

It’s music to the ears of the many Australians who received Dick Smith gift cards as Christmas presents, some running into the thousands of dollars.

The “goodwill gesture” by Australia’s two biggest supermarket chains came after furious customers blasted Coles and Woolworths for selling the gift cards, including those with a 10 per cent bonus offer, while Dick Smith was in financial strife.

The electronics retailer called in administrator McGrath Nicol on Tuesday, and its lenders appointed receiver Ferrier Hodgson.

Ferrier Hodgson announced that it would not be honouring gift cards or deposits, prompting a public outcry.

Those left out of pocket included James Briggs, a PhD student from Melbourne whose dying grandfather bought him a $1200 Dick Smith gift card to buy a computer for his studies.

Woolworths’ announcements means those who bought Dick Smith gift cards from any of its supermarkets, or Big W stores, can redeem them for a Wish gift card of equal value.

Wish gift cards can be also be used at Thomas Dux, Dan Murphy’s, BWS, Masters and Caltex Woolworths stores.

A spokesman said Woolworths had been “working with the gift card processors, Blackhawk and Vii, to determine a way to offer redemptions since Dick Smith announced it had entered into receivership”.

Coles has also written to Dick Smith’s administrator urging it to honour outstanding gift cards.

News.com.au reader Tony Smith slammed Coles on Tuesday for selling him hundreds of dollars worth of Dick Smith gift cards while the retailer’s fortunes crumbled.

While Coles maintained that it could not have predicted the retailer’s receivership — emphasising that it had already passed on the gift card funds to Dick Smith — it caved under the weight of public pressure.

The gift card swap could hit the supermarket chains’ bottom lines if they are unable to recoup the value of Dick Smith cards they sold, which could well run into the millions of dollars.

Those who bought direct from the beleaguered electronics chain have not been so lucky.

Unless Ferrier Hodgson changes its mind, they will have to register as unsecured creditors and hope that there’s enough cash to pay them once the banks have recouped what they are owed.

Other businesses to offer refunds include app start-up Prezzee, which quickly promised those who bought a Dick Smith gift card on its platform that they could claim its value against a gift card from one of its other partners, such as Myer.

Online retailer Kogan is offering a $25 voucher for each Dick Smith gift card, but will not value match and its offer is limited to one per customer.

Dick Smith has disabled visitor comments to its Facebook page, which in recent days has been subject to a deluge of angry posts along with messages from those keen to cash in on the situation. Some have offered to buy up Dick Smith gift cards and “try my luck as an unsecured creditor”.

Many customers were outraged that Ferrier Hodgson was continuing to operate Dick Smith stores while refusing to honour gift cards and deposits, essentially selling goods while refusing to hand over those that had “already been paid for”.

Shoppers left in a similar position by the Borders bookstore chain’s collapse were still fighting for refunds four years later, the Wall Street Journal reports.

When Borders filed for bankruptcy in February 2011, it left behind 17.7 million useless gift cards worth more than $200 million.

Meanwhile, the ACCC is monitoring Dick Smith’s receivership and how it will hit customers.

Unredeemed Dick Smith gift cards bought at Coles from July 1 last year can be exchanged, with proof of purchase, by filling out a redemption form, available online or by calling 1800 061 562, by February 29.

Those bought at Woolworths and Big W can also be exchanged by filling out a redemption form from tomorrow until March 7, available online or by calling 1300 767 969.

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