Sunday, March 09, 2008

It Ain't Wrong If It's Legal

Sharper Image, retailer of overpriced crap nobody needs, .has filed for Chapter 11 bankruptcy protection. Not a good thing,but it sure beats Chapter 17.

Naturally, there is some fallout for consumers. Seems SI had sold a butt load of gift cards during the last holiday season, and now won't redeem them. This is theft.

Apparently, according to published reports, retailers view gift card holders as debtors, and Chapter 11 protection means they don't have to honor those cards.
To that, I say "Bullshit".
In practice, gift cards are merchandise bought and not yet picked up by the consumer.
The money has been received. It is not a debt. Debts are money owed, often with interest charged, or in the case of a retail store, due within a prescribed time-frame before additional fees are added.

When the standard retail mark-up is factored into the goods, redeemed gift cards are a net profit for the issuer, and not an account paid. Unredeemed/unhonored gift cards are free money. A wind fall.

With this announcement of the Chapter 11 filing last month, hordes of gift card recipients flooded SI stores to redeem their cards before SI closed their doors.
It wasn't pleasant for an college age associate to have to deal with irate customers when instructed to inform them their cards were not being accepted.
As Loving Dad to one of these associates, I had to deal with the fallout as well.
(Guess who she calls whenever she has a bad day?)

It ain't right for the bigwigs at corporate to issue rules to it's field hands that essentially amount to theft. It's even more hypocritical when the field hands who are suspected of the same thing are dealt with harshly.

"If I steal five bucks, they call security, and I get handcuffs. But they steal $100 from a customer, and that's called a policy."

Welcome to the business world,Sweetheart.


BarnGoddess said...

you are right about the over priced CRAP! I was shocked at how much the useless stuff cost..

here's my snake chasing link:

Bike Bubba said...

You mean chapter 7, not chapter 17, right?

Agreed that refusal to honor those cards is unfair--we had the concern here when Northworst went Chapter 11 that they wouldn't honor their debts/frequent flier miles, either. That said, what do you do? Do you stiff the employees and holders of secured debt to honor unsecured?

Gino said...

7/17/27... yeah, you know what i meant. ;)

how would it be stiffing the holders of secured debt/employees. SI already has the cash. and the over-priced shit is still on the shelves, sitting there, not being sold anyway, hence the chapter 11.

what if you bought two show tickets in adavne, and when you showed up for the event, they had filed BK, and said 'sorry, we wont honor your seats because we want to sell them to somebody else?'
gift cards are 'will call' purchases. not debt.

Bike Bubba said...

I am under the impression that you're only allowed to file Chapter 11 when your obligations exceed your assets. I could be wrong, but if I'm right, to honor unsecured debt in such a scenario would be to ignore secured debt.

Vanesa Littlecrow W. said...

SI needs to be shot.