Got a Sharper Image gift card? You're up the creek pal! (1 Viewer)

whodatfever

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http://news.yahoo.com/s/ap/20080303/ap_on_re_us/bankruptcy_gift_cards


NEW YORK - You know that Sharper Image gift card you got for Christmas? Right now, it's worthless. And other gift cards in your wallet could lose their value, too.

As more retailers file for bankruptcy or go out of business, more than $75 million in gift cards are at risk of becoming worthless pieces of plastic this year.

"If I knew this was going to happen, I would have used them right away," said Jon Tapper, a public relations executive from Boston who received two Sharper Image cards as business gifts just a few weeks ago. Their total face value is $50.

"I love gift cards, but now this makes me think twice."

The Sharper Image announced late last month that it was suspending the acceptance of gift cards, at least temporarily. It urged shoppers to check the company Web site later this month for an update. That is typical of businesses that reorganize under Chapter 11 bankruptcy, which treats gift cards as a loan to the company, not as cash.
It's like Mitch Hedburg said: You take money, which is good everywhere, and force me to only shop at one store?


This makes me think twice about gift cards.
 

ra

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Alcohol can never go bankrupt.
Show your friends you care.
Give them booze.
 

Webmeistro

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Sorry Sharper Image, but that's illegal in Louisiana. You MUST accept gift cards you have issued out in this state.
 

buzd

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Sharper Image stuff is junk anyway. I had $100/credit and I had to buy and return 3 different things before I found something that worked. and that was a jambox that had terrible sound..
 
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Speaking of "gift cards"; Did you know that last year alone LOWES made a 41 Million Dollar profit from non spent gift cards?
 

Saint Mike

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Sorry Sharper Image, but that's illegal in Louisiana. You MUST accept gift cards you have issued out in this state.
Probably the federal bankruptcy law overrides Louisiana law.
 

Pure Energy

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I'm going to bump this thread because this is a great lesson in gift cards for this Christmas season. The economy has worsened so my guess is any gift card from any retailer is at some risk. My guess is cards from discount retailers such as Walmart and Target are probably safer than those from Circuit City, Best Buy or Nordstrom.
 

primadox

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Since so many retailers utilize Amazon, I'd feel safe buying an Amazon.com giftcard as well. JMO...

Good idea to bump, btw. It's that time of year, and I think we need to be especially cautious of buying gift cards from certain retailers.



/burned by Linen's 'n Things.../
 

St. Widge

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Since so many retailers utilize Amazon, I'd feel safe buying an Amazon.com giftcard as well. JMO...

Good idea to bump, btw. It's that time of year, and I think we need to be especially cautious of buying gift cards from certain retailers.



/burned by Linen's 'n Things.../
I know Circuit City is in trouble and I've heard rumblings about J. Jill/J. Crew and Eddie Bauer, but I haven't heard about any others that are really in trouble.
 

gaminerie

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A month ago, Circuit City petitioned the federal bankruptcy court to ALLOW them to accept gift cards.

http://news.cnet.com/faq-what-circuit-citys-bankruptcy-means-for-consumers/

IIRC, Linens N Things is another retailer in this situation, though they are now much further into liquidation. Macy's had also declared bankruptcy, but has been allowed to accept gift cards. It can really happen to any specialty retailer. If i had to watch any right now, i'd guess Best Buy, or a brick & mortar bookstore like Borders or Barnes & Noble. For shareholders' sake, they're not going to publicize if they're bleeding, but they probably are.

A gift card is classified as a liability, and in bankruptcy proceedings is treated as an unsecured debt on the part of the grantor.

Secured debt takes precedent over unsecured debt, so even if Circuit City is completely willing to accept gift cards in exchange for merchandise, conditions of bankruptcy prevent them from doing so unless they can get permission. Depending on how much secured debt they're carrying, i'd be surprised if they get permission from the court.

My understanding is that federal law overrides any state regulation on this, so stick with the stronger retailers if you're giving gift cards.

i wholeheartedly endorse the booze idea.
 
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redlandssaintsson

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they should over turn this federal law. It's basically a slap in the face to all those consumers who were loyal enough to shop there in the first place. Granted I've been given my share of Starbucks and Jamba Juice gift cards that are more likely to be used by me as ammo, but for the most part people get you cards for places you WILL go. And it's essentially stealing from these people. "hey buy this useless piece of plastic for 50 bucks, and then we wont EVER give you 50 dollars worth of service!"...
 

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