Gift Card Blog - ScripSmart

A&P Parent Co Great Atlantic & Pacific Tea Co Files For Bankruptcy

On December 12th, 2010, The Great Atlantic & Pacific Tea Company (NYSE:GAP) filed for Chapter 11 bankruptcy protection; the company plans to continue it's operations uninterrupted and keep all locations open and stocked with goods. However, it's common for companies in Chapter 11 to close locations in an effort to reduce cost and improve the bottom line; there is a chance the location nearest you may close in the futre. For example, CB Holding Inc. parent company of Charlie Brown's Steak House closed 29 of 49 locations and halted gift card sales after after filing for Chapter 11 bankruptcy protection.

Redeem Today

The Great Atlantic & Pacific Tea Company operates 395 stores in 8 states under several brands. If you If you own a gift card for any of the following brands, go out and use it today.

• A&P
• Waldbaum’s
• Pathmark
• Best Cellars
• The Food Emporium
• Super Fresh
• Food Basics

Keep in mind, Chapter 11 bankruptcy protection indicates the company plans to reorganize it's finances and continue operations. While it's possible The Great Atlantic & Pacific Tea Company will continue operations for years to come, this is red flag to all gift card holders: get out there and redeem ASAP.

Gift Cards Are Still Being Sold And Accepted

Unfortunately, the companies press release offers no information for consumers regarding gift cards. We called several locations and discovered gift cards are still being sold and accepted. It's great to hear gift cards are being accepted; however, it's not good to see they company is still selling gift cards to consumers. The responsable thing to do here is cease gift card sales until the company emerges from bankruptcy protection.

Conventional Wisdom

Consumer advocates typically advise consumers only to purchase gift cards from well known brands as a way to avoid being stuck with a worthless gift card. After all, larger options are not likely not disappear overnight; and if they have financial woes, consumers are likely to hear about them and have one last opportunity to redeem.

For the most part, this is solid advice. However, large well known companies can run into financial trouble, too. Their gift cards can become worthless and consumers may never know they had an last chance to redeem their gift. We've saw this happen to Hollywood Video earlier this year. Unfortunately, many consumers were unaware of the financial condition of Hollywood Video's parent company Movie Gallery. 

New Solutions By ScripSmart

At ScripSmart, we believe more can be done to help consumers get the most out of gift cards. Here are three ways we are trying to help consumers.

1. The A&P Gift Card has been on our gift cards to avoid list for quite some time due to The Great Atlantic & Pacific Tea Company's poor financial position. We've updated ScripSmart to reflect the bankruptcy filing. This list is an easy way to find out which gift cards might become worthless in the future.
2. A gift card's Gift Card Sore is negatively impacted when we classify it as being issued by a company which is financial unstable or in bankruptcy. Consumers can check the Gift Card Score of hundreds of gift cards on ScripSmart.com and receive helpful information on gift card terms, features and the financial stability of the issuer.
3. ScripSmart also offers an alert system for consumers. We'll alert those who have register a gift card with us via email anytime a company is marked as financial unstable or in bankruptcy. If you're one of the many who tend not to use a gift card shortly after you get it (we do it too!), consider registering it with ScripSmart to receive monthly summaries, bankruptcy alerts, expiration alerts and nag-me alerts. Signing up is easy and free so get your gift cards register for that extra protection. 

Sign up for a ScripSmart Account

 

New Feature: ScripSmart User Ratings

We're listening to your feedback and as a result, we've just introduced a new feature: ScripSmart User Ratings.

That's right, user can now login to review and rate gift cards! You'll find the 'Average User Rating' for any gift card just below the Gift Card Score on each gift card's webpage. Here is an example of the iTunes eGift Card:

User Ratings vs. Gift Card Score

Each Gift Card Score is generated based on attributes of a gift card's terms, policies and disclosures. In other words, it's a great metric for gauging the consumer friendliness of a gift card. On the other hand, Gift Card Score is not currently great for finding which gift card is most popular or offers the most customer satisfaction after the sale.

User Rankings on ScripSmart will help consumers easily identify which gift cards are most popular and alert them to which gift cards which may have a poor track record for satisfying customers. We'd like to think of ScripSmart User Ratings as "the word on the street".

KISS

Like all things on ScripSmart, the new User Ratings are simple:

1. ScipSmart Users may rate each gift card once. (If you don't have an ScripSmart Account, sign up now!)

2. Individual reviews and the corresponding ratings will be displayed for others benefit.

3. Ratings utilize a star system: 1 star is the minimum representing a poor review and 5 stars represents the best possible rating. Half stars may not be given during the user's review, but are presented for each gift card's average user rating. 

4. Each user has an opportunity to justify their rating of a gift card with specifics as to why they believe the gift card is a good or poor choice for other consumers.

In the end, ScripSmart's User Ratings and Reviews will provide key information to consumers regarding gift card programs and will be just one more tool in helping you find the best gift cards.

If you have any feedback on the ScripSmart, please share your thoughts and send us a note!

When A New Business Owner Must Accept Your Gift Card

There are times when a business may choose not to accept gift cards issued by a previous owner. However, more often than not, the new owner will need to honor your gift card. This is because more likely than not, they've purchases both the assets and the liabilities of the business. 

As it relates to gift cards, we can simplify this to:

1. Gift cards = liabilities. The company owes a customer products or services for the money accepted in exchange for the gift card.

2. Assets = name, logo, location, customer data and so forth of the business. In most cases, the reason one would buy a business is it's proven track record of generating sales as a result of it's assets.

A case shown on the People's Court demonstrates some of the issues surrounding this matter. In short, the new business owner was unaware a $700 gift certificate was sold and refused to honor it for the full value. This case serves as a good reminder to several best practices for both consumers and business owners.

For Consumers:

1. Always give the receipt with the gift card or gift certificate. It may be required for replacement or in this case, would have help prove the gift certificates legitimacy. 

2. Paper only gift certificates/cards should be avoided if possible. They are often not accounted for properly, can easily be damaged and in this case may appear forged.

3. Redeem your gift card sooner than later. In this case, four years was enough time for problems to arise. Keep in mind federal gift card law now states gift card funds may not expire within five years.

For Business Owners:

1. Offer a lenient gift card acceptance policy. In the long run, you'll be better off and avoid negative word of mouth. Take the opportunity to gain, not loose a customer for life.

2. Account for gift card sales and redemptions. If you sell your business, it will be important information. Furthermore, you may need to report unredeemed gift card fund as unclaimed property depending on the state law(s) governing your business.

3. Offer a clear and concise Gift Card Terms for customers who own or are considering the purchase of a gift card. If the gift card does not expire or impose fees, use it as a selling point and convince customers you offer one of the best gift card programs available.

In the end, the judge is right in ruling the business owner must accept the gift card. This confusion is the result of missteps by all parties involved  (including the previous owner). Here is the full episode (about 10 minutes):