GAME customers have been warned by law firm Thrings LLP that outstanding gift cards may never be redeemed by the retailer.
One of administrator PwC's first actions was to suspend gift cards and loyalty points, much to the frustration of customers. Thrings LLP's Mark Cullingford expects that PwC's choice to reverse their decision and to allow reward cards to be used to buy pre-owned games may just be a move to ensure that stock continues to sell, and not the turnaround that many gift card owning customers were hoping for.
Speaking to CVG, Cullingford, explained: "In essence, the administrator cannot honour a liability on a voucher or prepayment to full value when other unsecured creditors may get paid p/£."
"The loyalty card issue is a little different because he is selling goods at a discount - when he may be selling at a discount anyway. He is simply agreeing to sell goods that he may not otherwise sell at that price on a fixed discount basis and if these are redeemable on pre-owned games only, these games are probably likely to suffer more in a 'fire sale' and therefore he will want to enhance his sale price on what would otherwise be goods that drop in real value quicker."
Cullingford then added: "A buyer might be willing to offer transferability of loyalty as an incentive for sales and retain customers and the reopening of loyalty may be part of that process - but they are not likely to honour gift vouchers unless they have calculated that to do so is part of the price for the goodwill they are buying."
"And in doing so they will then seek to deduct that cost from the price they pay to the administrator for goodwill - but it is all part of a commercial assessment on the sale by the administrator and purchase by the purchaser."
Having said all that, a source close to the GAME situation today told MCV that customers might be able to start using gift cards again, possibly even as early next week, so don't do anything with your old cards just yet.