Archive for December, 2011

Prepaid Debit Gift Cards – Trends and Bends

Gift giving has not lost its popularity in these modern times where distant single living, busy family lifestyles and the cost of living seems to be gaining momentum. That said one often wonders how to go about finding the right gift while saving time and reducing costs.

At one time gift card giving seemed the perfect solution. While many like getting an occasional gift card to their favorite store or restaurant, other lament that such cards are impersonal, commercial and devoid of forethought.

An online business-marketing network focused on online sales and marketing notes a growing demand for gift cards among users of the Internet. To that end Fimark.net sees significant growth in store issued and prepaid gift card sales over the next 3 years.

Read the rest of this entry »

Are Gift Cards the Best Gift?

January’s retail sales strength is reflected in people redeeming their Christmas gift cards. The average adult received 3.2 gift cards this holiday season, up from 2.5 gift cards last year. Gift cards are more popular and this also moves spending into January. Consumers are also interested in receiving gift cards at other times that just at Christmas.

A survey by Deloitte & Touche USA found:

  • 80% of adults received at least one gift card to an apparel or food store
  • 33% received at least one gift card to a restaurant
  • 14% received one gift card to a mall or shopping center
  • 10% received a gift card that could be used at a variety of stores (e.g., an American Express gift card)
  • 5% received at least one for a personal service such as a manicure or massage
  • 5% received at least one gift card for an Internet site (e.g., ebay, Amazon)

Read the rest of this entry »

Bankruptcy and Gift Cards Explained

What happens to gift cards when a company goes bankrupt? Can a company refuse to redeem outstanding gift cards during bankruptcy? Does it matter whether the company declared Chapter 11 or 7 bankruptcy? Is there federal or state law regarding bankruptcy and gift cards? All these questions are the subject of this article.

Before answering the questions above, it is important to explain the difference between Chapter 11 and Chapter 7 bankruptcy. A company typically files for Chapter 11 bankruptcy protection when it wants to work with creditors to change the terms of its debt obligations and restructure its business in order to emerge from bankruptcy as healthy company. A Chapter 7 bankruptcy involves the liquidation of assets to pay creditors. When a firm files for a Chapter 7 bankruptcy, the company is going out of business and would typically close all stores.

However, a company planning on liquidating can also file a Chapter 11 bankruptcy protection, as in the case of KB Toys Inc, which filed for Chapter 11 bankruptcy protection in December 2008 even though the company plans to liquidate its entire business and close all stores. A company would typically file a Chapter 11 to liquidate in order to gain more control as it sells off assets. Therefore, for this article, what is important is whether the bankruptcy is to reorganize or liquidate, rather than whether it is a Chapter 7 or 11.

Read the rest of this entry »