Every now and then we get some tips from readers to pass on to you. Today is one of those days! First up is an awesome tip from JayMonster, a frequent commenter who blogs at the very fabulous Triple Venti:
Well, Home Ec 101 has helped me quite a bit, so I thought a lesson I recently learned would be good to pass along to others in the Home Ec 101 family.
In particular this lesson I learned about (painfully), is about Gift Cards. Now we all know that Gift Cards have become big business these days, every store offers them, and the holiday season has been extended into January for Retailers since that is when a great number of the cards sold over the holidays are redeemed. There is (besides the evil hidden inactivity fees, that some cards have) a potentially dark downside to these cards, that most people (like me until recently) are blissfully unaware.
When you have a gift card, you are technically (in legal terms) a creditor (and an unsecured creditor at that) of that Retailer. In other words, they have already received the money, but they owe you merchandise (in exchange). If however, the Retailer goes and files Chapter 11 you can suddenly find yourself holding a potentially worthless card with absolutely no recourse. If the Retailer is able to reorganize and come out of Bankruptcy, then you are of course fine. However more than half of all Chapter 11 cases go to Chapter 7 (liquidation). You could file as an unsecure creditor with the bankruptcy court, and hope there is something left when they get to you as they sell of the assets. However, in most cases, even the secured creditors only get pennies on the dollar leaving unsecured creditors (like the card holder) out in the cold.
Linens N’ Things is an example of a fortunate scenario, where they are trying to reorganize, and are continuing to honor their gift cards… at least for now.
Sharper Image however suspended all gift cards (and even merchandise credits) once they filed for bankruptcy protection. And any card a consumer is holding is for all intents and purposes, not worth the plastic it took to produce it.
In short, while there is no way to know for sure when or if a Retailer may go belly up. But if there are inklings that a particular outlet is not doing well, then it might be best to steer away from those Gift Cards.
So, Home Eccers, keep an eye on those gift cards and make sure the company is doing okay, if you’re planning to hold onto it for awhile!
The second tip comes from my pal and the name my kids love to say constantly, Jeffraham Prestonian. He picked up these SUPER cute melamine dishes for 80 cents apiece at Big Lots in Charlotte Park in Nashville. Now, this may not be a chain wide promotion, but it certainly can’t hurt to look. And seriously, bargain shoppers- don’t you just love that store? I like to go and just look even if I don’t have any money. You can find some of the most fab things at Big Lots.