HMV has confirmed it will not be accepting gift cards or vouchers from customers as the retailer prepared to collapse into administration.
The company confirmed its intentions after a board meeting, as exclusively revealed by Sky's City Editor Mark Kleinman .
The chief executive of HMV - which employs 4,350 people - said it was "business as usual" at the chain's 238 stores, which will remain open while administrators Deloitte attempt to find a buyer.
Trevor Moore told Sky News he was "absolutely confident" about the future of the business, but added: "It does require a number of significant changes in the business, and those changes we’re very clear about."
He said: "We would hope to find a prospective buyer that could work with us to enable me to deliver those changes and ensure that HMV - which is one of the consumer's 10 most favourite stores in the UK remains on the high streets that we operate in."
A company statement said it had ultimately failed to meet the conditions of its bank loans, and trading in HMV's ordinary shares had ceased.
It said the business "faced material uncertainties" and would probably "not comply with its banking covenants" at the end of January.
Confirming the appointment of administrators "with immediate effect", the statement added: "The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection."
Mr Moore urged staff at the chain to support each other despite being faced with an uncertain future.
"My message is that it's critically important - even more now than ever before - that we remain focussed on the job at hand," he said.
"That we engage with our customers, we look after each other, support each other, and engage ... to ensure the business continues to trade successfully."
He added: "As far as I'm concerned, right now it's business as usual - HMV's doors are wide open, we have stock to sell, we have teams to staff our stores and we have a business to run."
Celebrities have been among those sharing their memories of the iconic chain.
BBC 6Music DJ Lauren Laverne tweeted: "Long time since i was in #HMV, but I remember it well… RIP."
Also on Twitter, rapper Professor Green posted: "hmv bankrupt. we may as well just give up on any medium that involves hard copy and get on with it. #sadtimes."
And fellow artist Sway added: "Just a thought. If all of the artists and labels in the UK all made a small donation do you think it would be enough to save #HMV?"
Retail expert Mary Portas posted: "HMV was a brilliant business that was a great part of our Highstreets. So sad to see this one go."
The retailer, which has struggled for several years in the face of online competition, had announced last week an additional sale at its stores in a last ditch effort to raise cash but its £176.1m debt pile was too great for the move to have much impact.
Last year, the company sold off its most profitable arm, its live music business, as it attempted to slash what it owed.
In January 2011, suppliers including Universal Music came to HMV's rescue with a deal that helped the retailer shed some of its debt, but they are understood to have dismissed requests for more financial help earlier this month.
Analysts suggest the business model was already doomed - squeezed by internet retailers and supermarkets whose scale enables them to offer CDs and DVDs at cheaper prices.