Despite issuing a press release claiming that they will “continue to conduct business as usual,” The Sharper Image has suspended redemption of all gift certificates after filing for bankruptcy late on Tuesday.
After receiving several complaints that gift certificates were not being honored by the store the Consumerist was able to confirm via email with the Sharper Image’s corporate sales staff that the retailer is no longer selling or accepting the cards.
According to the California Department of Consumer Affairs legal guide on gift certificates, the holders of cards may have a claim against the bankruptcy estate of a retailer that files Chapter 11. If the court has prohibited The Sharper Image from redeeming gift certificates, you are considered a creditor in the case, says the CDCA.
“Consumers should weigh the potential benefits of a successful or partially successful claim, against the inconvenience and expense of pursuing the claim, Even a successful claim will take time. Bankruptcies in which there are assets can take up to a year or more before creditors are paid. In many cases, there are no assets.
Your prospects for receiving your money are better if the a store chooses to file Chapter 11 bankruptcy [ed. — like Sharper Image.] This means the store intends to reorganize, emerge from bankruptcy and continue doing business. But many retail stores fail to achieve that goal. Most Chapter 11 bankruptcies eventually end up in Chapter 7 bankruptcy, which involves liquidation of all assets and going out of business for good.
If you bought your gift card you may want to try a chargeback with your credit card company, but otherwise it looks like you’ll can just sit tight and wait it out or file a claim with the court.
Consumer Tips on Retail Bankruptcies (PDF) [California Department of Consumer Affairs]
Read the full article at Consumerist