Dick Smith in store decline

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620 posts

Ultimate Geek

#1461686 5-Jan-2016 14:30

Krishant007: Id feel worse for those customers that got the extended warranties :|. mind you, they shouldnt have been dooped into getting the extended warranty in the first place.

I think the DSE warranties will still be honoured. They are sold by Dick Smith, but they are underwritten by another company.

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sdav

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#1461688 5-Jan-2016 14:30

tdgeek:
sdav:
Kyanar:
They also confirm that stores will no longer honour gift cards and vouchers, and that if you have paid a deposit that your money is now forfeited to the receivers. A statement that if you ask me should be illegal. Gentlemen, start your chargebacks.

I don't have any gift cards, but I agree.

It's not like all the parties with a financial interest just decided to go into receivership today. It's possible the company/investors/receivers were willingly selling gift cards throughout the busiest shopping period of the year with the intention of not honouring them. That is reckless, but how to do you prove it?

It's not like their CGA obligations have ceased while their doors are still open. Anyone can return a product right now and be reimbursed, so why not gift cards?

IANAL so would be interested to know what a gift card is considered and whether you can truly fine print your way out of honouring them.

1. If the state of the business was such that it was going down the gurgler, then the directors can be liable. Buying goods from creditors when there was going to be no way to honour those debts. Takiomg money from gift cards knowing they won't be honoured. Same issue, if this is the case, I'm not saying it is. And thats short term cashflow, the oil a company runs on. Cashflow is king, more important than profit, and both of these facets were poor

Liquidation is now. Its immediate, all bets are off. If the business is allowed to trade, yes, there are options, but often its not as its another day of loss to bear for the secured creditors. The secured creditors may pop in and take their goods, almost literally

EDIT its not in liquidation. Skimming too much!

I just think using the general public's/shopper's money as a way to increase cashflow when your business is struggling should be illegal (if it isn't already). People take risks going on the sharemarket but that is a decision you actively take. They are essentially spreading their own risk to innocent shoppers to top up the coffers of a fledgling business. How should that be allowed (if it isn't, again I don't know)?

floydbloke

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#1461689 5-Jan-2016 14:30

Jaxson:
michaelmurfy:
Kyanar:

Uh, no. The receivers have already announced that no vouchers or gift cards will be honoured.

How can they get away with this?

The company can't pay it's bills, someone else comes in to manage them, they place a priority on refunding money to investors over customers.

Am I right in thinking that the taxman is always first in the queue?

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sir1963

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#1461697 5-Jan-2016 14:35

mattwnz:

Anyone know if the stores are currently open? They were giving new customers over Xmas, a $5 gift voucher if you signed up to their email newsletters, so I suspect those are void. Just glad I chased them up for my order, as it took them nearly a month to deliver, and had to go to their management to get it. I suspect there will be a few people who haven't got their orders, and I suspect they may become unsecured creditors.

Ha ha ha.... the $5 was probably an attempt to boost their value by having "large customer base" , and if not gives them another "asset" to sell to a 3rd party.

michaelmurfy

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#1461698 5-Jan-2016 14:37

sir1963:
mattwnz:

Anyone know if the stores are currently open? They were giving new customers over Xmas, a $5 gift voucher if you signed up to their email newsletters, so I suspect those are void. Just glad I chased them up for my order, as it took them nearly a month to deliver, and had to go to their management to get it. I suspect there will be a few people who haven't got their orders, and I suspect they may become unsecured creditors.

Ha ha ha.... the $5 was probably an attempt to boost their value by having "large customer base" , and if not gives them another "asset" to sell to a 3rd party.

Their main asset is the huge quantity of courier bags they seem to have...

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Kyanar

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#1461700 5-Jan-2016 14:40

floydbloke:
Jaxson:
michaelmurfy:
Kyanar:

Uh, no. The receivers have already announced that no vouchers or gift cards will be honoured.

How can they get away with this?

The company can't pay it's bills, someone else comes in to manage them, they place a priority on refunding money to investors over customers.

Am I right in thinking that the taxman is always first in the queue?

Yes indeed. Tax department, employees, secured creditors, unsecured creditors, shareholders. In Australia, the ATO can also issue a penalty notice making the directors personally liable for unpaid taxes and superannuation.

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#1461722 5-Jan-2016 14:58

Kyanar:
floydbloke:
Jaxson:
michaelmurfy:
Kyanar:

Uh, no. The receivers have already announced that no vouchers or gift cards will be honoured.

How can they get away with this?

The company can't pay it's bills, someone else comes in to manage them, they place a priority on refunding money to investors over customers.

Am I right in thinking that the taxman is always first in the queue?

Yes indeed. Tax department, employees, secured creditors, unsecured creditors, shareholders. In Australia, the ATO can also issue a penalty notice making the directors personally liable for unpaid taxes and superannuation.

Liquidator costs always come first (otherwise why would they do the job). Costs includes any wages and creditors proving credit after the business goes into liquidation.

Followed by secured creditors (but only against the asset secured - so if a vehicle is sold for less than owing they can't claim against the other assets and they become an unsecured creditor for the balance)

Next are preferential creditors - I think BICBW in order of, staff wages owing (up to around $18k per staff member, IRD (PAYE and GST), then the petitioning creditors expense in appointing a liquidator (if not voluntary))

Unsecured creditors are next

Followed by shareholders. Generally speaking they never see anything by the time it gets to the liquidation stage.

richms

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#1461727 5-Jan-2016 15:05

michaelmurfy:
How can they get away with this? Pretty lame for those unlucky enough to get vouchers for Xmas...

Pretty usual for gift vouchers, buyer of them might be able to start a chargeback if they bought with a CC, but otherwise that is what happens when you buy a promise from someone. Only any good as long as they decide to honor it.

I still dont understand why people buy vouchers when cash is still a thing.

Richard rich.ms

MikeB4

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#1461729 5-Jan-2016 15:10

richms:
michaelmurfy:
How can they get away with this? Pretty lame for those unlucky enough to get vouchers for Xmas...

Pretty usual for gift vouchers, buyer of them might be able to start a chargeback if they bought with a CC, but otherwise that is what happens when you buy a promise from someone. Only any good as long as they decide to honor it.

I still dont understand why people buy vouchers when cash is still a thing.

If one needs to buy a gift card Bank based ones are better.

tdgeek

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#1461743 5-Jan-2016 15:20

networkn:
tdgeek:
joker97:
Dynamic:
Kyanar: They also confirm that stores will no longer honour gift cards and vouchers, and that if you have paid a deposit that your money is now forfeited to the receivers. A statement that if you ask me should be illegal.

I agree. This is basically theft IMHO, as is the 'expiring' of a gift voucher (especially after only 12 months).

At least when Whitcoulls situation was looking dicey, the receivers made the choice to allow the use of a gift voucher as long as you spent the same amount in cash. (http://www.nbr.co.nz/article/redeem-vouchers-sooner-rather-later-cnz-nn-86463)

If you think this is theft,
If you have 10,000 hrs of annual leave with dick Smith you now officially have zero.

No thats incorrect.

First payments are the liquidators costs. Next are employee related, whuc is wages, PAYE, annual leave, and any withheld amounts from pay. After this comes the unsecured creditors. So while employee payments may be fully paid or part paid they aren't zero.

IRD is second only to the receivers costs I believe. May come after wages owed to staff but not before the annual leave.

Perhaps, thats how it used to be, but a quick google of the Govt website grouped them together

amiga500

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#1461746 5-Jan-2016 15:22

The signs at DSE Riccarton saying more portable hard drives will be coming
In 3 weeks may prove to be a tad optimistic..

DarthKermit

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#1461747 5-Jan-2016 15:25

Just hopped on the DS website. You wouldn't know that it's going down faster than the Titanic, except for the Gift Card page.

Click on that and you get:
https://www.dicksmith.co.nz/gift-cards

404 not found.
"

SORRY, WE COULDN'T FIND THAT PAGE"

tdgeek

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#1461749 5-Jan-2016 15:26

dafman:
tdgeek:
EDIT Right now, this is an Australian store issue, so BAU here. For now. Get buying and cashing them in

You're joking, right? Maybe exchanging cash at a DSE for actual goods on a shelf you can walk out with. Any other transaction, not something I would recommend.

I was generally referring to the gift card issue. Use the gift cards for purchases, and given the future, a good bargain might be had although don't expect a warranty to be there if they go under.

tdgeek

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#1461753 5-Jan-2016 15:30

Jaxson: Reminds me of Mainzeal. Once a company is in receivership, the doors are locked and everything inside belongs to them, to sell off in a bid to return as much money as possible to investors.
It gets real messy after that. If I worked at DSE I wouldn't leave anything of mine there afterhours for example.

Fully agree about the gift cards, and how rough that is.
The problem is the money spent to purchase those has gone, and may not be there even to refund them etc.

This hurts lots of people, staff and reps/merchandisers paid to visit the stores also etc.

No, no, no. Receivership is action taken by secured creditors to get the secured goods back. Either intact or liquidated. Everything inside isnot belonging to anyone
Reciever appointed by Tdgeek for goods over there valued at $50,000. They are mine as they are secured. Theuy are sold for $40000, thats my money and I now join the queue with $10000 unsecured debt

tdgeek

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#1461757 5-Jan-2016 15:40

Kyanar:
tdgeek:

So the voucher should be ok, subject to any fine print. And thus the employees would be in a better position

EDIT Right now, this is an Australian store issue, so BAU here. For now. Get buying and cashing them in

Uh, no. The receivers have already announced that no vouchers or gift cards will be honoured.

Hmm, recievers are only concerned with the secured creditors, so that seems to imply there wont be enough for them
which means there wont be any for the unsecured

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