Carrie Davis, spokeswoman for Yahoo Music, has confirmed today that the servers will indeed be shutdown but that reimbursement was coming.
"You'll be compensated for whatever you paid for the music," Davis said. "We haven't said exactly what we will do, but we will take care of our customers."
Because every customer has a different story, the reimbursement plan will be on a case-by-case basis. The company has now posted an FAQ page that includes a "contract customer case" button for any former or current users of the Yahoo Music Store.
It seems users will have two different options of reimbursement, either get all their money back, or receive DRM-free MP3s of each song they purchased that had DRM. Considering you can burn the DRM tracks to a CD and then re-rip them as DRM-free MP3s, the better deal would appear to be doing that and then asking for your money back.
Davis also made sure to note that the reimbursement only pertains to users of the Yahoo Music Store and that any monthly subscribers would have their services transferred to Rhapsody.