Written by Consumer Protection BCâs enforcement department
Scenario:Â
You just found out youâre having a baby and your best friend buys you a $50 gift card at a well-known baby clothing store. She kept the gift card until you had your baby. By the time you go to the store to use the gift card, you discover that while the store is still open, they have recently declared bankruptcy and the salesperson wonât let you use the card.
What would you do?
(a) Shred the gift card
(b) Ask the sales clerk for more information
(c) Demand the salesperson accept the gift card since the store is open and selling clothes
Answer:
(b) A business may continue to operate during a bankruptcy process however, there are rules the business must follow. In most cases, if the store is open for business, they are likely in receivership. That means they can continue to sell off inventory. Most businesses will provide the bankruptcy trusteeâs website where you can file a claim against the business. You should know though that it can be difficult to get money back in these situations as there are typically a variety of creditors. You can find out more about this process through the Office of the Superintendent of Bankruptcy website.
In many cases, if it’s a small business and not declaring bankruptcy, the business still may not accept the gift card. In most cases, their bank account has zero balance so they will be doing their best to sell off whatever they have.
Consumer Protection BC oversees BCâs Prepaid Purchase Cards Regulation which speaks mainly to fees and expiry dates, as well as what kind of cards are exempt. Thereâs certainly a lot to know about the gift card law in BC – if you would like more information, explore more blog posts related to gift cards.
ADDITIONAL READING:
The gift of gift cards
Good news for consumers: new laws in effect for prepaid cards (related to prepaid credit cards)
Whatâs the deal with deals of the day?
Gift cards â check out these tips!
Hi David. Unfortunately, the laws that we are responsible for speak mostly to fees and expiry dates and are silent when it comes to a business closing its doors. It is my understanding that there are no laws in place that speak to that issue. Often times in these situations there isn’t any money/products left to seek reimbursement from for goods/services that have been purchased in advance with a gift card.
Your blog says that “In many cases, if it’s a small business and not declaring bankruptcy, the business still may not accept the gift card.” I’m wondering what legal basis there is for a company to refuse to honor a gift card simply because it is winding up its business? Thank you.