Last week Yahoo! announced it plans to close its music store, shut down the DRM servers, and leave those who bought tracks with useless files that just won’t play.

Now the good news: Yahoo! will offer refunds for anything you’ve bought from their store.

The move could end up costing the company a fortune. Yahoo Music spokesperson, Carrie Davis, told Information Week: “You’ll be compensated for whatever you paid for the music… We haven’t said exactly what we will do, but we will take care of our customers.”

We hear refunds will be issued on a case by case basis, or swapped for MP3s without DRM. The company has created a special page to answer questions, with a direct link to customer care.

In short, it’s another gigantic headache for companies and customers alike, with DRM right in the middle. Our advice: avoid copy-protected songs altogether. There are tons of alternatives, and they won’t lock down your music.

TBC | £TBC | Yahoo (via Distorted Loop)