Earlier this week, I received an email from a California consumer regarding thee gift cards. Clearly Liz had done some research and is a savvy consumer, she writes:
"I am in possession of 3 older Blockbuster Gift cards and I went to use them the other night. Opps, I found out that even though they are selling NEW gift cards, they are no longer accepting old ones.
I have looked into the California State Gift Card Law and California Civil Code 1749.6 that states even if a company goes into Bankruptcy, it needs to honor the gift cards purchased before bankruptcy. I have called Blockbuster and got no where.
DO you have any advice for me? It's not really about the amount of money on the cards - it's the principle at this point."
We should all aim to use our gift cards sooner than later.
If you're a person who tends to forget about them, sign up for a free ScripSmart account so you can be reminded monthly of the gift cards you own. We also send out alerts when we catch wind a gift card may soon become worthless.
In fact, we sent out several alerts to those who registered a Blockbuster Gift Card in their ScripSmart account and the first one was months before the gift card actually became worthless. It's ScripSmart's solution to a common problem consumers face with gift cards.
California Section Code 1749.6
Liz also mentions California Gift Card Law in her note. Specifically, section 1749.6(b) which states:
"An issuer of a gift certificate who is in bankruptcy shall continue to honor a gift certificate issued prior to the date of the bankruptcy filing on the grounds that the value of the gift certificate constitutes trust property of the beneficiary."
I'm a fan of seeing such a law on the books because it helps give consumers one last opportunity to redeem their gift card while the business is liquidating it's assets.
But section 1749.6(b) does not help Liz and other holders of the "Old Blockbuster Gift Card" recoup any value. It's confusing and one of the reasons I wasn't happy to see Blockbuster start issuing a new gift card less than a year after it's gift cards had become worthless.
Keep in mind, there are two different types of Blockbuster Gift Cards in consumer's hands right now:
Issued by Blockbuster, Inc. = Old Gift Card (worthless)
Issued by Blockbuster, LLC = New Gift Card
You have to look at the back of the card to determine which one you have. This difference offers some insight into why Blockbuster is not currently violating California Gift Card Law.
The Old Blockbuster Gift Card is what has been issued for years and it was honored while Blockbuster Inc. was in bankruptcy (up until April 2011). That process ended when Dish Network purchased the assets (brand, locations, etc.) of Blockbuster, Inc. and then formed Blockbuster, LLC.
Blockbuster, LLC is a completely separate legal entity and is not in bankruptcy and never was in bankruptcy. Dish Network was given the option to accept the Old Blockbuster Gift Cards, but they were not required to do so by the Bankruptcy Court.
It's all much more confusing than it should be and I really wish Dish Network would not have introduced this level of confusion to the marketplace, it's simply bad for consumers and the gift card industry as a whole.