There needs to be a book on gift-card etiquette. Not from a consumer perspective of how to gracefully give or receive gift cards, but from the merchant perspective of how a business should honor gift-card redemptions.
Ironically, chapter one in the book should be titled “Chapter 11: What to do about outstanding gift cards.”
In recent weeks, Sharper Image unfortunately painted a classic “What not to do” picture for the industry. After Sharper Image filed for bankruptcy on Feb. 19, the San Francisco-based company said it would not accept outstanding gift cards, gift certificates, merchandise certificates and rewards cards at any of its stores, on its Web site or for catalog orders. A veritable uproar ensued across Internet chat rooms and many speculated that the once-popular retailer had committed public-relations suicide.
On March 7, Sharper Image released a statement that it would, “Immediately resume redemption of all its customers’ gift cards, reward cards, gift certificates and merchandise certificates for their full value after Bankruptcy Court approval.”
There are two fairly significant stipulations to the reinstatement policy: The cards or certificates must be redeemed in full in one transaction, and customers must spend at least double the value of the gift card or certificate in the transaction.
However, the most telling aspect of Sharper Image’s March 7 statement are the final words—“after Bankruptcy Court approval”—which elucidate a fact that bloggers, consumers and even retail executives fail to grasp. When a retailer files for Chapter 11, the decision to allow that retailer to accept or not accept outstanding gift cards is made by the Bankruptcy Court, not the retailer.
In the company’s prepared statement, Sharper Image CEO Robert Conway stated, “We are extremely gratified that our company will now be able to honor the full value of all pre-Chapter 11 gift cards, reward cards and merchandise certificates. I sincerely hope the vast majority of customers will feel this is a fair resolution to the difficult problem and we look forward to serving our customers well today and for many years to come.”
Because Sharper Image aspires to recover from bankruptcy and continue the success of its retail operations, it was particularly important to address the gift-card problem and offer its customers a positive