Protecting consumers ought to be the priority and it is hard to believe HMV’s fate would have been different had it been obliged to tell Christmas shoppers it couldn’t sell them vouchers
Administrator Deloitte has studied HMV’s business and, thankfully, decided that gift vouchers can be honoured after all. The saga, though, feels unsatisfactory. It is clearly deeply unfair that consumers, who cannot be expected to monitor the financial health of high street names, are put in the position of unsecured creditors when administration happens.
It is also a nonsense that HMV, which warned before Christmas of “material uncertainties facing the business” and a probable breach of banking covenants, could be free to continue selling vouchers.
The law should be changed to stop the latter abuse in future. The only serious objection is that vulnerable retailers might hasten their demise by advertising their frailties and, potentially, losing custom.
Yes, that’s a risk but protecting the consumer ought to be the priority. In HMV’s case, the outstanding vouchers are worth £6m-£7m. It is hard to believe the fate of the company would have been any different if it had been obliged to tell Christmas shoppers: sorry, it couldn’t sell them a voucher at that time.