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.
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.
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.
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.
- 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.
- 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.
- 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.