gift cards bankruptcy

gift cards bankruptcy

What happens with giftcards files when a company files for bankruptcy? The recent bankruptcies of Linens' n Things, The Sharper Image and Bombay Company have the problem of gift card redemption in bankruptcy brought to the fore. With the economic situation expected to worsen in 2008, more retailers are likely to Bankruptcy Register, and as expected, consumers will be affected with gift cards.

If you buy a greeting card with an unsecured creditor of the issuer Redeem Gift Card until you will be the full value of the gift card (unless it expires or is eaten up by fees). If the gift card issuer files for Chapter 11 bankruptcy, federal law allows the company to stop honoring gift cards. However, the petition could allow the company to bankruptcy court, the further reduction of gift cards.

A company planning to continue their business activities do everything, gift cards, honor, while under bankruptcy protection to make. The refusal to accept gift cards is a bad move, and ultimately work against the company because they only customers much it really needs during the bankruptcy reorganization . vex Here are four (4) reasons why the continuation of the redemption of gift cards under bankruptcy reorganization is a smart move for retailers:

Maintain customer loyalty: When does the company stay in business and refused to accept gift cards only anger customers who feel betrayed. This will not only to avert the current customers but also potential customers going to competitors. This is because some injured people their terrible experiences with family members, Friends and colleagues share, which is likely to remain on the company because they do not like to go through a similar experience. In todayâ € ™ s world of e-mails spread like viruses, is the last thing a company needs for an e-mail to be circulated to the terrible experience Gift Card Holders went through with the company.

Minimize Competitor actions: When a company uses the redemption of gift cards in the bankruptcy, it opens the door for the competition for customers to steal. A good example is seen in recent bankruptcy of The Sharper Image. At the beginning of the bankruptcy, the company announced the suspension of the redemption card. As expected, responded negatively affected customers on the decision. Brookstone and ThePurePro.com, competitors from the Sharper Image saw an opportunity to win more customers announced so they designed special discounts at The Sharper Image Gift Card Holders. It seems, started The Sharper Image, to feel the effects of these measures and their later Decision reversed and began adoption gift cards from customers.

Project Business as Usual picture: When a company files for Chapter 11 Bankruptcy, it proposes a rule, a plan of reorganization to keep its business alive. This plan may include selling, closing or consolidating some sites . speichern For locations, opening the shutters, it is still important to project an image of business as usual.

The refusal to accept gift cards, would send the wrong signal to send, as they reminded people that the company is in serious trouble. Customers can begin to ask if service begins to deteriorate, what support especially for large purchases. Continuation of the redemption of gift cards is a good way to assure customers that their shopping experience with the company will not negatively affected by the insolvency.

Increase Sales: The research has shown that spending the Gift Card Holders generally about 20% more than the value of the gift card. By accepting gift cards in the bankruptcy, the company has the potential revenue, as people redeem gift cards would probably spend more than their gift card value, which the companies have increased sales and hopefully be more profitable.

About the Author:

Kwame Kuadey is an expert on Gift Cards and runs a popular Gift Card Blog. You can find more information on Gift Card Ideas, Gift Card Holders & Packaging, Gift Card Exchange, and Free Gift Card deals by visiting his site at GiftCardBlogger.com. GiftCardBlogger is a service of GiftCardRescue.com.

Article Source: ArticlesBase.comBankruptcy and Gift Cards – 4 Reasons Why Retailers Should Honor Gift Cards During Bankruptcy Reorganization

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