It’s a problem any time a retailer goes belly up, but nobody talks about it too much … until the advent of social media, that is. Now, companies going through closedowns and liquidations also have to prioritize helping customers get rid of unused gift cards. Cue RadioShack…
According to various reports, there are upwards of $46 million in unredeemed RadioShack cards floating around out there in Consumerville. And, according to New York’s attorney general, the dying electronics chain is probably on the hook for every single one. Talk about insult to insolvency!
Worse, now people have Twitter and Facebook to ask where to “exchange” their plastic RadioShack cash. That means a constant online stream of people complaining, nothing new on the web certainly, but this complaining is focused on a specific brand … and there are still franchisees out there trying to make it work.
Forgot about them, didn’t ya? While the corporate office is shuttering 1,700 RadioShack locations, there are still umpteen hundreds of franchise stores as well as 1,400 locations Standard General snapped up to combine with their Sprint locations. These locations remain open, but nobody is saying whether the gift cards can or will be honored at these locations.
According to the bean counters, the gift cards are a line item on the corporation’s debt sheet, which means they have to come out of company coffers regardless of the bankruptcy settlement recently reached. Right now, gift cards purchased in at least six states are eligible for refunds. To date, a $500,000 escrow account has been set up to get some gift cards turned back into cash quickly. For those playing at home, yes, 500K is nowhere near 46 large.
Hoping to get around this awful arithmetic, it has been reported that consumer-purchased gift cards will get priority over those distributed as promotional stunts. Hope someone was keeping close count on all that. Otherwise, good luck.
But that’s not the worst hurdle consumers left holding empty plastic with a RadioShack logo on it have to overcome. At this point, the bankruptcy court working through the ruling still has to approve the deal. So, at this point, consumers might be able to turn their cards in at franchise stores, but the franchisees may be out that money.
Or, everyone will have to wait … or nobody gets any satisfaction at all. None of these are happy choices. And all of it adds up to more salt in an already festering wound.
CEO of New York based PR Firm 5WPR; Ronn Torossian is the leading PR Executive, author of best selling PR book “For Immediate Release: Shape Minds, Build Brands, and Deliver Results with Game-Changing Public Relations”, a life long New Yorker and a proud father.
