Rewards programs and gift cards are the first things to go right before a company folds since they aren't a consideration during bankruptcy court.
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gmb- what you describe is correct. The description you give is what in business is called a creditor. The company owes someone something be it merchandise, or services. This would just be considered a pre-payment for the said merchandise or services.
No different than a vendor shipping merchandise to a store and then expecting to get paid at a later date. In effect when you buy a gift card you are shipping your merchandise (Cash) to a store (SHC) and are expecting to get something (Merchandise) back at a later date.
This is an easy one. Just read the fine print. Most gift cards are not redeemable when a company goes out of business or by an act of God the local store cannot honor the gift card. Gift cards are considered a form of debt or account payable. Therefore, any gift card purchaser, not holder, is considered a creditor. Unless all the gift card purchasers (not the recipiants) file a class action suit and win, the gift cards are worthless. And you better have an original receipt to show, you (the original purchaser), actually purchased the card.
Gift cards are worthless in bankruptcy. Low man on the pole gets nothing and that is considered unsecured debt.
@gmb call it bs all you want but my experience was real. I was told the GC was not valid anymore and was handed a paper that said that I had to make a claim as a creditor with the bankruptcy information.. I doubt I would get anything worthwhile for a $25 GC so have not attempted. The company was Gander mountain.
@rrh I call BS on this one. A gift card is not a creditor. You can't go into a retail store a get the cash value of those gift cards back as money. If you're getting product that has already been paid for (a pre-paid gift card) then why would they turn you away?
Yep. Just tried to use a gift card from a store from another company that is in liquidation and they said I had to file with bankruptcy court since I am now considered a creditor.