Buying a gift card--instead of an actual present--is the coward's way to shop. Still there's a lot of us chickens out there, because the gift card industry racks up nearly $50 billion in annual sales.
Now, however, consumers must fear that those gift cars, bought with cold hard cash, will suddenly become worthless bits of plastic.
An excellent story on the Marketwatch financial web site today tells how those holding gift cards from the now-bankrupt Sharper Image chain are left holding the bag.
Sharper Image sales clerks are telling gift card customers to take a hike because the boss no longer has to honor these chits.
Apparently, federal bankruptcy laws allows the retailer to get away with this dodge.
Adding insult to injury, nearly $25 million in Sharper Image gift cards were bought by gift-givers during last year's Christmas holiday rush. With those proceeds in hand, the retailer filed for bankruptcy reorganization in January after posting dismal year end sales.
As a result, those expecting to buy a Roomba Vacuuming robot, Stretching Robotic Massage Recliner or other wacky items are stuck.
Lillian Vernon is another retailer that joined the recent march into bankruptcy.
You have to wonder how dim Sharper Image's bosses are to let this gift card debacle occur.Obviously, they aren't too sharp or the chain would not have entered bankruptcy. Still, if management harbors any hope of emerging from Chapter 11, it shouldn't be ticking off loyal customers who acquired these gifts cards, nor those who paid for them. That, my friends, is a constituency with a long memory.
Moreover, Sharper Image's retreat may also damage the entire industry's estimated $50billion-a-year-gift card business--a segment retailers have come to depend upon for that all-important fourth-quarter earnings pop.
As for bankruptcy, what can we say? It was once a mark of shame to go bust. Now, bankruptcy is merely another business strategy, often a crafty way to reposition a company and get out from under hefty obligations.
Airlines use it to abrogate union contracts and pensions, while automakers use it as a threat to reduce employee health care benefits and costs. Now, a major retailer is hiding behind it to skirt a direct obligation to consumers.
OK, buying a Sharper Image gift card is a cheap way to avoid braving the rigors of the shopping mall. But cheating customers by not honoring those cards? That's real cowardice.
(Photo courtesy of Jerome on Flickr.com)