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  # 1465086 7-Jan-2016 12:42
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Rickles: 

I feel that the poor people who are holding gift certificates and the like are really being shafted .... as has been pointed out in various media they/someone paid real money for them, and essentially they are owed goods from the store regardless.

Not honouring the credits is tantamount to stealing, and made worse simply because they sold something, never provided it, and are now seeking to sell the business and its stock to someone else ... double-dipping?


I tend to agree, especially when the store is effectively still trading.  It would be different if the doors were shut and nothing was moving in or out.
Similar thoughts around the online store still operating actually...

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  # 1465087 7-Jan-2016 12:42
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sir1963:
MadEngineer:
Detruire:
trig42: How big is the Riccarton DSE?
Would it be big enough to fit a JB HiFi? (JB  Stores have a much bigger footprint than the average DSE, but a DSE Powerstore like they have at Sylvia Park, and Manukau would be big enough).
Wonder if JB are interested. Probably not given the small size of most of the stores.


JB bigger than DSE? Really? The JB store in Palmerston North feels half the size of the DSE store.
yet JB seem to pack in much more stock and is 100x busier :p

ps, remember when palmy had two dse stores?


And, so I am told, the Palmy store was the most profitable one in NZ.


Maybe that's because the rent is a lot lower. wink




rm *


 
 
 
 


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  # 1465091 7-Jan-2016 12:44
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Detruire:
MadEngineer:
Detruire:
trig42: How big is the Riccarton DSE?
Would it be big enough to fit a JB HiFi? (JB  Stores have a much bigger footprint than the average DSE, but a DSE Powerstore like they have at Sylvia Park, and Manukau would be big enough).
Wonder if JB are interested. Probably not given the small size of most of the stores.


JB bigger than DSE? Really? The JB store in Palmerston North feels half the size of the DSE store.
yet JB seem to pack in much more stock and is 100x busier :p

ps, remember when palmy had two dse stores?


DSE seemed to have a greater number of categories of stock, but less choice within each of those categories (the whole lack-of-focus thing.)

I do. Pretty sure the smaller one still stocked (a rather limited range) of components very close to it's closure.



So did the large on on Rangatikei st for a while.
I went in there to see if the parts drawers were still there and was going to make an "offer" for it all and see how lucky I could be
who knows, maybe someone beat me to it.



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  # 1465092 7-Jan-2016 12:47
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Detruire:
sir1963:
MadEngineer:
Detruire:
trig42: How big is the Riccarton DSE?
Would it be big enough to fit a JB HiFi? (JB  Stores have a much bigger footprint than the average DSE, but a DSE Powerstore like they have at Sylvia Park, and Manukau would be big enough).
Wonder if JB are interested. Probably not given the small size of most of the stores.


JB bigger than DSE? Really? The JB store in Palmerston North feels half the size of the DSE store.
yet JB seem to pack in much more stock and is 100x busier :p

ps, remember when palmy had two dse stores?


And, so I am told, the Palmy store was the most profitable one in NZ.


Maybe that's because the rent is a lot lower. wink


Who knows, but I did quite well when the small store closed.

Got a UPS, Signal/Function Gen, Soldering Iron and a few other things real cheap laughing

And we bought a heap of ink jet cartridges and other stuff from big one before xmas at VERY cheap rates laughinglaughinglaughing

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  # 1465107 7-Jan-2016 13:00
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Jaxson:
Rickles: 

I feel that the poor people who are holding gift certificates and the like are really being shafted .... as has been pointed out in various media they/someone paid real money for them, and essentially they are owed goods from the store regardless.

Not honouring the credits is tantamount to stealing, and made worse simply because they sold something, never provided it, and are now seeking to sell the business and its stock to someone else ... double-dipping?


I tend to agree, especially when the store is effectively still trading.  It would be different if the doors were shut and nothing was moving in or out.
Similar thoughts around the online store still operating actually...


I agree. But, as they are in receivership, all assets are now secure or insecure, its a holding pattern. The card holders are in the same boat as many creditors. But comments re securing cash monies held for cards or lay-bys are very valid too. Thats a legal issue which might get some traction in the light of this situation

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  # 1465110 7-Jan-2016 13:10
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tdgeek:
Jaxson:
Rickles: 

I feel that the poor people who are holding gift certificates and the like are really being shafted .... as has been pointed out in various media they/someone paid real money for them, and essentially they are owed goods from the store regardless.

Not honouring the credits is tantamount to stealing, and made worse simply because they sold something, never provided it, and are now seeking to sell the business and its stock to someone else ... double-dipping?


I tend to agree, especially when the store is effectively still trading.  It would be different if the doors were shut and nothing was moving in or out.
Similar thoughts around the online store still operating actually...


I agree. But, as they are in receivership, all assets are now secure or insecure, its a holding pattern. The card holders are in the same boat as many creditors. But comments re securing cash monies held for cards or lay-bys are very valid too. Thats a legal issue which might get some traction in the light of this situation

I wonder whether a legal requirement for companies to hold a minimum of 50% (or perhaps 70%) of the value of outstanding gift cards and prepayments in a trust account, with a balance adjusted monthly at a minimum, would be an acceptable middle ground.  Holding 100% would be a mission to manage and would be a financial disadvantage, and most of us know that about 1/4 of gift cards are never redeemed.

If the company goes toes up, the card holders are not completely out of pocket.  Give the card holders 30/60/90 days to lodge a claim, and if enough people don't bother, the applicants might even get 100% of their money back.




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  # 1465115 7-Jan-2016 13:13
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Detruire:
sir1963:
MadEngineer:
Detruire:
trig42: How big is the Riccarton DSE?
Would it be big enough to fit a JB HiFi? (JB  Stores have a much bigger footprint than the average DSE, but a DSE Powerstore like they have at Sylvia Park, and Manukau would be big enough).
Wonder if JB are interested. Probably not given the small size of most of the stores.


JB bigger than DSE? Really? The JB store in Palmerston North feels half the size of the DSE store.
yet JB seem to pack in much more stock and is 100x busier :p

ps, remember when palmy had two dse stores?


And, so I am told, the Palmy store was the most profitable one in NZ.


Maybe that's because the rent is a lot lower. wink


Or because it's the only store in that part of the country with electricity (think bugs to a bright light ) :))


 
 
 
 


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  # 1465121 7-Jan-2016 13:24
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One thing I read in an AFR article is that rather cynically NAB and HSBC may have called in receivers when they did specifically because of the number of gift cards that had been sold and not yet redeemed, because they knew that gift card holders became unsecured creditors so that gift card funds would be theirs for the taking.

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  # 1465123 7-Jan-2016 13:24
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Dynamic:
tdgeek:
Jaxson:
Rickles: 

I feel that the poor people who are holding gift certificates and the like are really being shafted .... as has been pointed out in various media they/someone paid real money for them, and essentially they are owed goods from the store regardless.

Not honouring the credits is tantamount to stealing, and made worse simply because they sold something, never provided it, and are now seeking to sell the business and its stock to someone else ... double-dipping?


I tend to agree, especially when the store is effectively still trading.  It would be different if the doors were shut and nothing was moving in or out.
Similar thoughts around the online store still operating actually...


I agree. But, as they are in receivership, all assets are now secure or insecure, its a holding pattern. The card holders are in the same boat as many creditors. But comments re securing cash monies held for cards or lay-bys are very valid too. Thats a legal issue which might get some traction in the light of this situation

I wonder whether a legal requirement for companies to hold a minimum of 50% (or perhaps 70%) of the value of outstanding gift cards and prepayments in a trust account, with a balance adjusted monthly at a minimum, would be an acceptable middle ground.  Holding 100% would be a mission to manage and would be a financial disadvantage, and most of us know that about 1/4 of gift cards are never redeemed.

If the company goes toes up, the card holders are not completely out of pocket.  Give the card holders 30/60/90 days to lodge a claim, and if enough people don't bother, the applicants might even get 100% of their money back.


Trust account, nice thought, but would never fly. Reason, setting up trust accounts, and then segregating and managing cash through them costs additional overhead - and because we all demand retailers supply us kit at the lowest possible price, thus the slimmest possible margin for retailers, the cost would be uneconomical, so they wouldn't bother.

Seriously, just stop buying gift cards if you are not prepared to wear the very slim, but not impossible, risk that the retailer may go under. It's that simple!

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  # 1465135 7-Jan-2016 13:47
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MikeB4:

The massive sell off of stock over the last month will have ensured there are very lean pickings for the receivers. The question is what happened to the funds from the product sell off, if it has"melted away" then
the receivers may have legal recourse if it can be shown the company was insolvent and Directors did not act to rectify or acted in an inappropriate manner regarding funds.

 

 

AIUI, the main problem was that there was not a massive sell off of stock. There was substantial discounting of a lot of the stock and a write down of IIRC approx $60M in the value of the stock but the actual sales, at those discounted prices were very disappointing.

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  # 1465136 7-Jan-2016 13:47
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dafman:
Dynamic:
tdgeek:
Jaxson:
Rickles: 

I feel that the poor people who are holding gift certificates and the like are really being shafted .... as has been pointed out in various media they/someone paid real money for them, and essentially they are owed goods from the store regardless.

Not honouring the credits is tantamount to stealing, and made worse simply because they sold something, never provided it, and are now seeking to sell the business and its stock to someone else ... double-dipping?


I tend to agree, especially when the store is effectively still trading.  It would be different if the doors were shut and nothing was moving in or out.
Similar thoughts around the online store still operating actually...


I agree. But, as they are in receivership, all assets are now secure or insecure, its a holding pattern. The card holders are in the same boat as many creditors. But comments re securing cash monies held for cards or lay-bys are very valid too. Thats a legal issue which might get some traction in the light of this situation

I wonder whether a legal requirement for companies to hold a minimum of 50% (or perhaps 70%) of the value of outstanding gift cards and prepayments in a trust account, with a balance adjusted monthly at a minimum, would be an acceptable middle ground.  Holding 100% would be a mission to manage and would be a financial disadvantage, and most of us know that about 1/4 of gift cards are never redeemed.

If the company goes toes up, the card holders are not completely out of pocket.  Give the card holders 30/60/90 days to lodge a claim, and if enough people don't bother, the applicants might even get 100% of their money back.


Trust account, nice thought, but would never fly. Reason, setting up trust accounts, and then segregating and managing cash through them costs additional overhead - and because we all demand retailers supply us kit at the lowest possible price, thus the slimmest possible margin for retailers, the cost would be uneconomical, so they wouldn't bother.

Seriously, just stop buying gift cards if you are not prepared to wear the very slim, but not impossible, risk that the retailer may go under. It's that simple!


Many retailers though aren't that low margin. Dick smiths was also never low margin, it was always an expensive store to shop at. They may have had some lower margin stuff, but their  accessories and components etc were high margin. The reason it was successful in the past was purely convenience, and that they sold things other stores didn't stock. It was like a lolly shop for tech people. I don't believe the cost outweighs the benefit. It is up to the store to participate or not. If they don't they will probably lose the business of the stores that participate. We have updated our consumer laws for so many other things, but gift cards are teh wild west. IMO gift cards should also not expire, or they should last at least 2-3 years. Usually people pay cash for them, so why should a business be able to keep that money after a period of time.

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  # 1465137 7-Jan-2016 13:50
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jpoc:
MikeB4:

The massive sell off of stock over the last month will have ensured there are very lean pickings for the receivers. The question is what happened to the funds from the product sell off, if it has"melted away" then
the receivers may have legal recourse if it can be shown the company was insolvent and Directors did not act to rectify or acted in an inappropriate manner regarding funds.
AIUI, the main problem was that there was not a massive sell off of stock. There was substantial discounting of a lot of the stock and a write down of IIRC approx $60M in the value of the stock but the actual sales, at those discounted prices were very disappointing.


They were only selling some of the older products at rock bottom prices. eg things like older iphone cases, older chargers with 30 pin connectors, old kindles, and old tablets and phone and things which weren't big sellers etc. Many things were not discounted at all. Maybe it kept their cash flow up over the last few months, to try an improve their christmas sales figures.

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  # 1465144 7-Jan-2016 13:58
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tdgeek:

Most certainly. They can be held personallly liable.   There are mumblings as in OZ, DSE gave 10% discounts on the gift cards, pre Xmas. Gives the word misleading a whole new meaning

 



 

I know that it must hurt deeply for those folks who bought gift cards but I would not be so quick to accuse the management of DSE of wrong doing.

 



 

They wanted to drop prices and shift stock in order to get money to satisfy their bankers that they were a going concern when the post Christmas reviews were made.

 



 

They discounted their own brand products by a huge amount but they had a whole load of stock that they could not discount like that.

 



 

You must have noticed that there are certain brands that hardly ever get significant discounts. Apple for one, but they are not alone. DSE could not drop their prices for top brand products by a large amount because of contractual clauses in their relationships with those suppliers. By selling gift cards at a discount, they were able to offer savings on those top brands.

 


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  # 1465147 7-Jan-2016 14:01
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mattwnz:
dafman:
Dynamic:
tdgeek:
Jaxson:
Rickles: 

I feel that the poor people who are holding gift certificates and the like are really being shafted .... as has been pointed out in various media they/someone paid real money for them, and essentially they are owed goods from the store regardless.

Not honouring the credits is tantamount to stealing, and made worse simply because they sold something, never provided it, and are now seeking to sell the business and its stock to someone else ... double-dipping?


I tend to agree, especially when the store is effectively still trading.  It would be different if the doors were shut and nothing was moving in or out.
Similar thoughts around the online store still operating actually...


I agree. But, as they are in receivership, all assets are now secure or insecure, its a holding pattern. The card holders are in the same boat as many creditors. But comments re securing cash monies held for cards or lay-bys are very valid too. Thats a legal issue which might get some traction in the light of this situation

I wonder whether a legal requirement for companies to hold a minimum of 50% (or perhaps 70%) of the value of outstanding gift cards and prepayments in a trust account, with a balance adjusted monthly at a minimum, would be an acceptable middle ground.  Holding 100% would be a mission to manage and would be a financial disadvantage, and most of us know that about 1/4 of gift cards are never redeemed.

If the company goes toes up, the card holders are not completely out of pocket.  Give the card holders 30/60/90 days to lodge a claim, and if enough people don't bother, the applicants might even get 100% of their money back.


Trust account, nice thought, but would never fly. Reason, setting up trust accounts, and then segregating and managing cash through them costs additional overhead - and because we all demand retailers supply us kit at the lowest possible price, thus the slimmest possible margin for retailers, the cost would be uneconomical, so they wouldn't bother.

Seriously, just stop buying gift cards if you are not prepared to wear the very slim, but not impossible, risk that the retailer may go under. It's that simple!


Many retailers though aren't that low margin. Dick smiths was also never low margin, it was always an expensive store to shop at. They may have had some lower margin stuff, but their  accessories and components etc were high margin. The reason it was successful in the past was purely convenience, and that they sold things other stores didn't stock. It was like a lolly shop for tech people. I don't believe the cost outweighs the benefit. It is up to the store to participate or not. If they don't they will probably lose the business of the stores that participate. We have updated our consumer laws for so many other things, but gift cards are teh wild west. IMO gift cards should also not expire, or they should last at least 2-3 years. Usually people pay cash for them, so why should a business be able to keep that money after a period of time.



because they have to keep their cash flow up, if every customer kept their gift card for 2 -3 years and then they were all used m at once  the store is basically giving their stock away .




Common sense is not as common as you think.


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  # 1465150 7-Jan-2016 14:05
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vexxxboy: 

because they have to keep their cash flow up, if every customer kept their gift card for 2 -3 years and then they were all used m at once  the store is basically giving their stock away .


That is why they shouldn't be using them as a form of cash flow, as they actually haven't provided that service/product yet. They should really only be treated as an accounts receivable, until the card is actually used. If a store is using it for cash flow (which is essentially like being given free money) then that is going  to cause problems when the card is honoured. But stores that sell gift cards know that a significant amount of them will never be used, so they are win win for retailers. 

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