The Sharper Image Not Honoring Gift Cards, Certificates
So that The Sharper Image bankruptcy filing won't affect the stores, you think? Not so. A source just got back from a The Sharper Image where he tried to use his $150 gift certificate he received for Christmas. Instead of a bag full of scale model Lamborghini Countaches he was handed this in return: a letter explaining that his gift certificate would not be honored. Those are the hot winds of the ironic breeze.
The customer added, "The manager told me she already has a new job as internally they were told it is totally over."
(You can click the image for a larger version.)
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That is essentially fraud if you ask me! It may be a gift card, but that card represents $150 dollars already given in payment to the sharper image. There must be some law about this. That guy should contact the BBB and whoever else is necessary to make the store make good on its promise.
Someone posted a comment on my blog about the gift cards not working on the site. Sounds like it is much worse than that! Sharper Image says, "Thanks for the money!"
My prediction is additional lawsuits against Sharper Image. Expect one from the investors. Expect one from the consumers.
People are freaking sheep. Its a LAW.
Q What happens if the seller of the gift certificate or gift card files bankruptcy?
A A gift certificate or gift card sold by a seller that seeks bankruptcy protection may have no value. However, the holder of the certificate or card may have a claim against the bankruptcy estate.
Sellers that file "Chapter 11" (reorganization) bankruptcy intend to stay in business, so they typically will ask the bankruptcy court for permission to honor gift certificates in an effort to maintain good customer relations.
If the bankruptcy court does not allow gift certificates or gift cards to be honored, or if the seller files "Chapter 7" (liquidation) bankruptcy, holders of gift certificates or gift cards are creditors in the bankruptcy case. They have relatively high priority among unsecured creditors in a Chapter 7 case, and may receive some percentage of the certificates or card’s value, but only if the bankruptcy estate has enough assets to pay claims.
For whatever reason the media is completely against Sharper Image. Everything they release is completely biased.
I would take this as my authorization to shoplift, up to the value of the gift card.
I'd be pretty darn upset...
If someone got me a Sharper Image Gift Card. Unless it were for the full amount of the killer chair with the massager things in it. Then I'd probably already have it. I'd be posting from it.
A shame all around.
Those who got these for Christmas, tell your gift giver asap. Typically, you're within the window still (just barely) to have your credit card company reverse the charges. Let them deal with it.
I think you hit the nail on the head, CoffeeGeek. Most gift cards would have been bought with credit cards. I suspect credit card companies might allow even a little more latitude for Xmas purchases. Offer to send them the cut-up gift card and that might be an easy way out of this mess.
Buying a gift card is essentially making a loan to the issuing store. If they go bankrupt, you're a creditor with a claim against the company's assets in bankruptcy court, the same as a bank, contractor, or supplier. The court will decide how much you get, if anything, when the bankruptcy is settled.
Mr. Airship is correct. Even worse, it's an INTEREST-FREE loan, to a creditor who will try to weasel on the debt even under the best of circumstances.
This is reason #47 why gift cards are dumb.
Even dumber: Visa/AMEX etc. "gift cards." You pay an up front fee and then pay an ongoing 'maintenance fee' over time. It is possible to buy one of these stupid cards and have it eventually become worthless without ever using it. Simon Malls is nortorious for these kinds of gift cards. Scam of the decade.
They should have at least stop the sales of the gift cards a month prior to filing the bankruptcy. If they had expected for bankruptcy they should have known for months...
My friends ordered $200 gift card few weeks prior to bankruptcy by the time the card was mailed it was already after February 19...
I agree with everything here...BUT would like to add that it is not just gift card holders who are getting stuck. I have a 'Merchandise Certificate' that was issued because an item I had purchased was defective from day one. These are not being honored either.
So - I paid over $60 for an item, it didn't work, and now I'm out my money. I didn't even purchase a gift card! You wonder why they get portrayed negatively in the media? THEY DESERVE IT!!!
Yes, it should be illegal - but isn't. And class action lawsuits rarely work to the victim's advantage....
AND...I can't go back to my credit card company, since my item was purchased before Christmas, so I'm outside the window.
I thought about waiting it out, since many companies make it thru these proceedings...but I just don't trust S/Image in today's economic climate. I read an AP article today that Brookstone will accept all Sharper Image gift cards, etc. in exchange for 25% discount on their (Brookstone) merchandise. It is a similar-type company... we may want to consider that...even if it doesn't get us ALL our $$ back!
A-R-G-G-H-H-H!!! I just checked my inbox, and this is what I found from S/Image:
Up to 60% off - Save now on hot products!
I want to scream......
What about those prepaid upgrades. Will they be honoring that.
I have a $950 of merchandise credit.... I am waiting to hear the results after court date March 19th.... Hopefully they will put innocent customers like us first in line since we are individuals not companies and the debt to us is incredibly low compared to the 200 million they owe to creditors. Otherwise, they might lose a lot more customers thus really putting them out of business for good.
um, sorry, but you may be better off. their stores are mostly just full of cheap and useless chinese crap anyway. last time i browsed a TSI store, i was just worn out looking for something that made any sense at all and didnt just look like it was waiting to get home to fall apart.
i mean, get real, what do you expect from gimmix r us?
there needs to be an insurance or some type of protection for the consumers. Closest thing I found was a website that came out with a press release soon after the incident. Quoted from marketwire: "Leverage Inc. today announced a new bankruptcy insurance policy that allows customers holding gift cards purchased via its LeverageCard.com destination from Sharper Image and other merchants filing for Chapter 11 bankruptcy protection to transfer remaining, unredeemable balances to gift cards from other retailers available on the Leverage site."
For Christmas my husband received a stress reducing machine from Sharper Image. He used it for the trial period and it did not work for him. After following the instructions of Sharper Image I mailed it back on 2/8/08. On 4/22/08 I called Sharper Image to tell them I had not received the $323.95 merchandise credit. I was told it was mailed to me several weeks ago. They confirmed that they had the correct address (which they did) and told me they would send another merchandise credit to me. This they said would arrive between 10 to 15 business days. On 5/15/08 I called again to say I still had not received the credit. At this I was told it was only mailed out on 5/2/08 and would I please be patient and wait the 10 to 15 business days from this date. I called on 6/2/08 to say I still had not received the credit. This time what I was told blew me away. I think this borders on criminal. The customer service rep told me that the first time I called to say I did not receive the credit that customer service rep could have given me a number which I could have used to redeem merchandise online,in store, or by catalog. Unfortunately as of 5/31/08 (2 days ago) Sharper Image does not accept merchandise credit any longer. It is obvious they did not send out the credit either time. They continuously strung me along until it became too late to redeem my credit.
God, people, it's not fraud. It was the will of the U.S. Court of Bankruptcy. They put the measure in place to protect the company from the influx of customers that *did* flood into the stores to burn up their gift cards and merchandise certificates, fearing the company would go under. Ironically, it was precisely because they feared the company would go under, that it went under. But that's beside the point. The bankruptcy court wanted to ensure that the Sharper Image would be capable of repaying its debtors, which would not happen if products (assets) flew off the shelves hand over fist without so much as a single dollar coming back into the company, the plan being that fresh income coming into the company helps pull the company out of Chapter 11, and therefore return to business as usual. The masses, however, are idiotic sheep and ultimately screwed themselves out of their store credit by getting pissy, waving their hands in the air and stating they'd never return. THAT helped them get their money's worth out of the cards, didn't it? Ultimately, the situation sucks out loud, but it is not fraud. It's court ruling.
As for the customer saying the manager was "internally told," that's complete bull. There was *NO* internal announcement until the company was sold and Hilco started the liquidation process. There were rumors spread between the stores and from some of the higher ups, but that's all, rumor. This article is total, one-sided garbage, rumor in and of iself and nothing more. Makes me sick.
Everyone has some great points. So since Feb, they filed for bk, they voided the gift cards entirely, then they said people can use it, if they spend twice the value of the card. However, now, they are officially closing down all their stores and their cards are no longer acceptable. I don't want this to be a blurb--you can feel free to moderate this, but our company has a gift card bankruptcy policy--if your cards are purchased through our site, we can replace it for you. email me at austin@leveragecard.com.
The Bankruptcy Court should NOT assume that the funds received by Sharper Image in the form of Gift Cards are assets of the company.
These funds ARE different than the funds invested by shareholders and are different than goods supplied under a purchase arrangement to Sharper Image by its vendors and suppliers.
The Gift Card Funds, held in Trust by Sharper Image are “unfulfilled sales”.
Instead of exchanging cash at the time of purchase, or extending credit in exchange for the consumer’s transaction, Sharper image was given cash TO HOLD until the gift card’s recipient came in to select the gift.
The gift card holder’s funds, purchased in “good faith” should be returned to them 100% on the dollar as the funds had not yet been earned by Sharper Image.
The Duller Image,enough said!