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Letter Re: The Year Gift that Cards May Spell "Gotcha"
James,
I stumbled over this, earlier this week, and I feel it may be of interest to
you and your readers. Certainly, this warning needs to be passed around to
as many as possible, here in the US.
Many retail stores are planning on declaring bankruptcy after the holiday buying
season is over. Many more are planning on closing down stores, once the holiday
sales
have emptied inventory.
This means trouble for one of our newest 'gift choices', the Gift Card.
Gift cards are not actual money. They are treated as "Unsecured Loans" from
the purchaser, to the company who issued the gift card. Unsecured loans are
the last to be paid off in a Bankruptcy situation, and are usually just written
off the books. Gift cards from a Bankrupt/closed company will rarely be honored
or transferred. They become useless pieces of plastic.
Additionally, should you give a Gift Card to someone, they could find that
all the branches of the Company/Store in their area are closed. And you usually
can't use a Gift Card on their web site!
So, to be prepared this year, please try and avoid Gift Cards. But if you must,
then use these guidelines:
1.) Purchase Visa or Mastercard Pre-paid cards. Target and Wal-Mart gift cards
are also probably safe, as these companies have not announced major store closings.
2.) If you must buy a gift card, please check the
Snopes link for a list of stores that are closing down or declaring bankruptcy:
This list is semi-regularly updated. Also, putting the name of the store/chain
into "Google News" (news.google.com) will give up-to-date information.
Remember, restaurant gift cards are included! Bennigans declared bankruptcy
and folded hundreds of locations a few months ago. - Brian, in Austin, Texas
