Bankruptcy: Law Firms Concerned about Retailer’s Unused Gift Cards

Gift Card Fraud

Consumer attorneys are trying to help customers get their gift card purchases from stores that have filed for bankruptcy.

Gift cards are a great present for many, and a wonderful resource if you’re low on cash. But with many retailers filing for bankruptcy because of the pandemic, customers are oftentimes left wondering if their cards are any good.

“We’ve got four big cases where it’s clear that gift card holders are under threat. And two cases where gift card holders got wiped out,” Myles MacDonald with Sto Helit PLLC said.

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Myles MacDonald and Attorney Thomas Burt, from Wolf Haldenstein in New York, have filed Class Proofs of Claim in Bankruptcy Court. They say retailers are only allowing very short periods of time for people to use gift cards.

“That’s a problem. The Bankruptcy code has a provision that allows for a priority, and we think a 2016 decision just got that flat wrong, cast that into doubt and so now we’ve got retailers going bankrupt that are treating gift cards like they don’t have to get priority.”

“Each of these bankruptcy cases is you know, $ 20 million here. $30 million there, $40 million here. But that adds up to a lot over time. Alot of consumer savings, and the average family in America is in debt! Finding a gift card lying around, when you’ve got $10,000 in credit card debt, you know, that can make a big impact for you and your family,” MacDonald said.

One retailer they are closely watching is Stein Mart. Last month, Stein Mart announced that they filed for Bankruptcy. On their claims website, the company announced the last day to use the card is September 21st…  WSMV News4