Customers of the Dick Smith store in Wellington's Featherston Street reacted in January to the news that the Australian company had gone into liquidation.

Dick Smith customers are losing out after the company's receiver confirmed it will not honour outstanding gift vouchers or refund deposits paid for goods.

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Christchurch resident William Chong received an exchange voucher worth $239 for faulty goods purchased last year and tried to redeem it on Tuesday when he was turned away.

He said the manager at the Riccarton Dick Smith store told him they were no longer exchanging vouchers from 12pm, as per instructions from their head office.

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The manager did not ask for any contact information and told Chong to wait and just "listen to the news" to see when, or if, his vouchers could be used again.

"Those people [who got gift vouchers] paid money over the counter. It should be as good as cash," Chong said.

Brenda Whiting of Hamilton is "furious" at the news after exchanging a Fitbit from Dick Smith for a $50 gift voucher over Christmas.

She bought the item as a Christmas gift for her granddaughter but now she was going to have to spend another $50 because the receiver was not going to honour gift vouchers.

"Surely this is akin to theft - they take your money without even advising they won't honour the voucher they sell."

Wellington Dick Smith customers were holding onto worthless gift cards. Stores in Wellington, Porirua and Lower Hutt had ceased honouring the cards by Tuesday afternoon.

Meanwhile bargain hunters were circling the embattled electronics stores after news broke of the company's voluntary administration.One customer leaving the Featherston St store said "I came looking for some things at the right price and found them".

Dick Smith staff in Napier, Hastings and Gisborne said stores in the three cities were not accepting gift vouchers but were advising customers to hold on to them as they awaited directions from the receivers.

An update was expected some time over the next few days, staff at the stores said, with one describing the current situation with gift cards as being a "freeze" rather than the stores refusing to honour them.

The embattled electronics retailer announced it had gone into voluntary administration on Tuesday morning, following a trading halt on Monday pending an announcement about its "funding position and debt financing covenants".

Voluntary administration is a short-term procedure where an external administrator is appointed to take over the company's affairs and decide on its future.

McGrath Nicol was called in as the voluntary administrator and Ferrier Hodgson appointed as receiver.

In a statement, Ferrier Hodgson said it would try to sell the company as a going concern.

A going concern is a company that is operating and making a profit.

"Affected customers will become unsecured creditors of the group," it said in the statement.

Ferrier Hodgson said it would continue to pay Dick Smith's 3300 employees and the chain's 393 stores would operate as normal while it restructured the company and tried to sell it.

Ferrier Hodgson partner James Stewart said it was too early to tell what caused Dick Smith's current dire financial situation, other than noting it had become "cash constrained in recent times".

Stewart said the New Zealand arm of the business was profitable and expected it to be attractive to buyers.

A Ministry of Business, Innovation and Employment spokesperson said customers wanting refunds for gift cards or vouchers should contact the receiver or liquidator to register a claim. Customers would need to put their claim in writing and provide evidence of what it owed, for example, a receipt.

Consumers with a deposit on an item became unsecured creditors, the spokesperson said.

"This means they may not get their goods or money back."

The Ministry said customers may still have rights under warranties provided by a third party company, for example extended warranties, which were covered under the Fair Trading Act.

The Ministry would not comment on customers left out of pocket from Dick Smith online purchases, or whether it was legal for Dick Smith to refuse gift cards but to continue accepting upfront payments for items.

Dick Smith is a major sponsor of the NRL Auckland Nines, organised by events and promotional company Duco.

Duco director Dean Lonergan said Dick Smith did not owe them any money for this year's event and he expected it to run as normal.

"If any issues come up we'll address them as they come up. We've been in this position a few different times. We wish Dick Smith all the best," he said.

Dick Smith cut the value of its stock by at least $65.9 million across Australia and New Zealand late last year.

At that time, the company's director of investor relations, David Cooke, said its New Zealand sales were declining but the rate of decline had halved in the last second half of the year.

Its shares on the Australia Stock Exchange plunged 57 per cent after the company announced it could not guarantee profit guidance given in October and warned of possibly more writedowns.

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