Scuba shop closed before I finished my training! Now what?

[mike_s]

Actually, this is allowed under federal bankruptcy law. The bankruptcy judge has a responsibility to secure all assets first for the benefit of the secured creditors. Unfortunately, gift card holders are unsecured. In most cases, the bankruptcy judge will not allow any "creditor" who is unsecured (the customer holding the gift card) to get any "benefits" from the assets until the secured creditors are paid or accept settlement.

While you are correct it's perfectly legal, it still screws the consumer. Just because it's legal doesn't make it right. Most of those consumers wont' file paperwork to be listed as a creditor in the bankruptcy filing. So the company will just benefit from their loss.

Interesting is that Consumer Reports actually did an article a month or two ago about this issue...

Just the same, if Dive Sports goes out of business tomorrow, I doubt my gift cards from there will have much reimbursement value either. But that would likely be true for Scuba Toys, Scuba.com, Divers Direct or any other shop that "closed overnight".


But merchants benefit from unredeemed gift cards every year.

Best Buy earned $16million in unredeemed gift cards last year.

Last year of the $80 billion in gift cards that were purchased , $8 billion worth of them will never be redeemed. Most of this self inflicted by the card holders.

Then you've got the "monthly maintenance fees" (of say $2/month if not used). They add. That alone is a racket.

 

[Steve02]

But merchants benefit from unredeemed gift cards every year.

Best Buy earned $16million in unredeemed gift cards last year.

Last year of the $80 billion in gift cards that were purchased , $8 billion worth of them will never be redeemed. Most of this self inflicted by the card holders.

Then you've got the "monthly maintenance fees" (of say $2/month if not used). They add. That alone is a racket.

While I am "somewhat" fine with merchants who want to charge a "maintenance fee" on the gift cards; my rub about this is there needs to be a law which would force these stores to give cash back for the cards. I have gift cards to stores, for one reason or another, I will not shop at. I should be allowed to go into the store and get the cash equivelant of what's on those cards. But in reality, that doesn't happen. Sadly I've actually told family and friends that I would rather receive nothing than to receive a gift card - yet they still don't listen.

 

[ScubaSteve]

But merchants benefit from unredeemed gift cards every year.

Best Buy earned $16million in unredeemed gift cards last year.

Last year of the $80 billion in gift cards that were purchased , $8 billion worth of them will never be redeemed. Most of this self inflicted by the card holders.

Then you've got the "monthly maintenance fees" (of say $2/month if not used). They add. That alone is a racket.

This is why it is no longer legal to put expiry dates on gift certificates (in Ontario at least).

 

[Andy077]

This is why it is no longer legal to put expiry dates on gift certificates (in Ontario at least).

Same in Connecticut, no expiration or maintenance fees

 

[ohmdiver]

Same in Connecticut, no expiration or maintenance fees

and NY wants to tax them...

 

[letterboy]

didnt any red flags raise when YOU had to review what you learned with the INSTRUCTOR?

 

[BDSC]

As we get back to the original subject matter and as I read through this thread, my advice about the K-Y is looking better and better.

 

[mike_s]

As we get back to the original subject matter and as I read through this thread, my advice about the K-Y is looking better and better.

for both subjects, the LDS screwing you, and the Gift Card retailers screwing you.

 

[Stu S.]

So, the merchant abandoned you. Did you have an agreement or contract allowing you to finish this at any time? Otherwise, the merchant may well think you abandoned him. In similar programs, like a health club, there is no refund if you pay and don't use it. Buy sports tickets and miss the game, there is no refund.

Best wishes in recovering your money. It seems a difficult task.

 

[PhilEllis]

While you are correct it's perfectly legal, it still screws the consumer. Just because it's legal doesn't make it right. Most of those consumers wont' file paperwork to be listed as a creditor in the bankruptcy filing. So the company will just benefit from their loss.

I was talking ONLY about bankruptcy law. It is not the "choice of the merchant" in that circumstance. It is the decision of the bankruptcy conservator. I don't think that the merchant "benefits" when this, or any other asset, is handled in bankruptcy. There are a few exceptions, but in most cases the merchant would really prefer to be back at the store, taking those gift cards. Unfortunately, financial conditions prohibit that for them.

But merchants benefit from unredeemed gift cards every year.

In most states, at some point in time (usually 1-3 years), an "abandoned" gift card becomes the property of the State under various escheat provisions, and some portion (100%-60%) of that money must be sent to the state. In Alabama, there is some amount of dispute as to which types of gift cards are covered under the general statutes that have escheat provisions. Ala. Code 35-12-73(b)(1) seems to give an exception for gift cards without an expiration date and without service charges, but the department of revenue will still demand the money to be turned over to the state. So, merchants shouldn't really count on that money too much.

Phil Ellis
www.divesports.com