No refunds yet for Gramophone memberships, gift vouchers

The Gramophone store at The Cathay on Sept 18, 2013. The sudden closure of local music retailer Gramophone last week has left a sour note with some holders of the store's gift vouchers and deposit-backed memberships. -- MY PAPER PHOTO: JASON QUAH&nbs
The Gramophone store at The Cathay on Sept 18, 2013. The sudden closure of local music retailer Gramophone last week has left a sour note with some holders of the store's gift vouchers and deposit-backed memberships. -- MY PAPER PHOTO: JASON QUAH 

The sudden closure of local music retailer Gramophone last week has left a sour note with some holders of the store's gift vouchers and deposit-backed memberships.

It is unclear whether they will be able to claim the money owed to them, possibly amounting to several thousand dollars. The store, which mostly sold CDs and DVDs, closed on Sept 18, citing difficult trading conditions.

Gramophone told The Straits Times by e-mail it has "received inquiries from about 20 membership card-holders and three gift voucher holders and has advised them accordingly".

The company "intends to be wound up and will take the steps necessary towards this", but "in the meantime, the company is not allowed to make any payments out".

Customers with membership deposits or gift vouchers "will be treated as creditors of the company" and "will be informed via e-mail if and when there is an update".

Gramophone did not comment on the number of membership holders and value of gift cards with outstanding credit, nor did it provide the deposit-backed membership's terms and conditions.

Two membership card-holders told The Straits Times the programme included discounts on most store products, and staff had said at card registration they could recover the one-time $300 deposit on termination of membership at any time.

"The news of their closure was sudden to fans of the store such as myself, and I would just like to know when I can get the refund that we were promised," said media planner Bryan Goh, 38, who became a member as he was a frequent customer and enjoyed Gramophone's special-edition CDs.

The Consumers Association of Singapore (Case) said "consumers might not be able to secure a full or partial refund in the end" if Gramophone "does not have enough recoverable assets to pay off the sums".

What typically happens is that priority goes to secured creditors such as financial institutions and banks, and holders of gift vouchers and memberships end up as a lower priority as "unsecured creditors", said Case executive director Seah Seng Choon. He urged Gramophone to honour claims "out of goodwill" since "the gift cards and vouchers were bought in good faith".

And he advised consumers to file a "proof-of-debt" form as soon as a liquidator is appointed, "to signal their formal claim for payment from Gramophone", to expedite the process.

Membership holder Justin Qiu is unfazed. He said he is "not so worried" about the outcome of his claim as the company keeps a comprehensive database of membership information.

The 31-year-old researcher, a store member since 2008, said hopefully: "I feel sad to know of their business closure, and can wait for further notification from them."

hpeishan@sph.com.sg