HMV administration: what are your rights?
So what are your rights if you still have gift cards and vouchers from the company?
AdministrationHMV announced last night that its 236 stores were to be put into the hands of the administrator, after it breached the conditions of its loans, its suppliers refused to tide it over and the banks decided enough was enough.
It issued a statement saying: "The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection and in the circumstances therefore intends to file notice to appoint administrators to the company and certain of its subsidiaries with immediate effect."
It wasn't a huge surprise, and was something we reported on last week when the chain announced a huge sale. The warnings before Christmas had been a worrying enough sign, and it seems that festive trading was the final nail in the coffin.
VouchersAt the moment many things are uncertain. There's a great deal of debate as to whether this is the end for the chain, or whether it can find a buyer in order to continue as a much smaller chain and keep the brand alive. The stores will continue to trade while the administrators go over the business and decisions are made about its future.
However, one thing has been made clear by the firm: it will no longer be accepting gift cards and vouchers. It's a real blow for the thousands of people with money still on cards - many of whom will have received them as Christmas gifts.
However, there is still some hope. Citizens Advice has highlighted a loophole which can come in very handy at times like this. It's called the Chargeback scheme, and can be used if whoever bought the vouchers did so on a debit or credit card - regardless of how much they spent.
As long as they bought the gift cards or vouchers less than 120 days ago, they can contact their bank and get them to ask HMV's bank to reverse the transaction and refund the cash back into their account. This only works if there has been a breach of contract that you can prove. However, administration of a company falls into this category.
There are no absolute guarantees. Your card provider may not be able to get the money out of HMV's bank - it depends on its financial position. However, it's definitely worth trying as soon as possible.
If whoever bought the gift card did so on a credit card, and spent more than £100, then the Consumer Credit Act Section 75 gives them the right to a refund, but it's thought that few people will fall into this category.
If the voucher was bought in cash, then it may still be worth hanging on to it just in case. Bear in mind that Comet's administrators initially refused to accept vouchers, and then changed their mind when the picture became clearer. This is not common, but given that it does happen occasionally it may not pay to be too hasty.
RefundsThe company has also said it won't be doing refunds or exchanges. This is harder to get around.
If there's something wrong with the goods you purchased, it depends what the product is, and how you bought it. If it was worth over £100 and you paid by credit card, Section 75 may be your solution again. If not, then you can approach the manufacturer for a repair or refund. This is relatively straightforward for electronic goods, but not for CDs and DVDs, which may just have to be written off.
If it's just an unwanted gift, then your best bet is a resale. There is a plethora of resale sites, but Amazon and eBay are the best-known, and should get you at least some of the value of your unwanted music and film.
Finally, there's the question of whether you should take advantage of the sale and buy online. This is a dangerous option. When the administrator is in charge, at any time they can decide to stop delivery of items bought online and refuse refunds. It'll be in the lap of the gods as to whether you will have your items by then.
You may want to take advantage of the sale. You may want to salvage something good from the demise of a high street favourite, but if you're going to do that then you're far better on the high street - ideally with a credit card to be on the safe side.