Woolworths has matched Coles' offer to exchange the now worthless Dick Smith gift cards bought at Woolies or Big W for its own giftcards.
The Woolworths' WISH cards can be redeemed across Woolworths' entire retail group, including the Woolworths supermarkets, Big W, Thomas Dux, Dan Murphy's, BWS, Masters and Caltex Woolworths stores.
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Shoppers lashed out at Coles and Woolworths this week, claiming on social media the supermarkets promoted the gift cards in the lead up to Christmas but sources inside both supermarkets claim the '10 per cent extra value' offer on the cards was driven by Dick Smith.
Coles beat Woolworths to the punch by offering to exchange Dick Smith gift cards bought at its supermarkets early on Friday morning.
However, Coles is only offering to exchange the Dick Smith cards for gift cards that can be spent at the Coles supermarkets not any of the other Wesfarmers-owned retailers, which includes Bunnings, K-mart and Target.
Coles has also written to Dick Smith's administrator, McGrath Nicol, urging it to honour outstanding gift cards.
Dick Smith called in McGrath Nicol on Tuesday, leaving customers with thousands of dollars of unredeemable gift vouchers and employees uncertain about their future.
Receiver Ferrier Hodgson, which was brought in by Dick Smith's bankers to try to claw back debt owed to the company's creditors, said on Tuesday it would not honour outstanding gift vouchers or refund deposits paid for goods, and affected customers would become unsecured creditors of the group.
Dick Smith, Coles and Woolworths have come under fire from angry customers for promoting the gift vouchers in the run-up to Christmas by offering an extra 10 per cent value on those bought through the supermarkets.
But sources close to Coles say the electronics retailer was the driving force behind the December campaign, and ran these types of promotions through Coles and rival Woolworths several times a year.
Earlier this week, Coles said it was unable to offer refunds for gift cards as it had already passed on the funds to Dick Smith.
But on Friday it said in a statement that "as a gesture of goodwill to our customers" it would exchange valid Dick Smith gift cards bought at Coles between July 1 and the company going into administration for Coles gift cards of equal value. The offer is only open to customers with proof of purchase showing the gift cards were bought at Coles.
It is not clear whether Woolworths will match Coles' offer, but it is understood Woolworths has had discussions with Ferrier Hodgson in regards to the gift cards sold through its supermarkets.
Dick Smith staff have borne the brunt of customers' frustration this week, with reports at least one store was forced to call the police in a bid to calm shoppers annoyed their cards became worthless once the business came under the control of administrators and receivers.
It is understood Dick Smith senior staff are baffled by the receiver's decision not to honour the gift cards, which is further damaging the retailer's already battered brand.
Coles withdrew Dick Smith Electronics gift cards from sale as soon as it was informed the company had been placed into voluntary administration.
The Australian Securities and Investments Commission has advised that customers who buy gift vouchers from a company that collapses can try to get their money back through their credit card issuer.