So, you thought Borders stores had gone away? A bankruptcy judge is expected to hear a case from two consumers who got stuck with $125 in unused gift cards. They have requested the court approve their claim as part of a class action lawsuit. In essence, they are trying to get Borders to reimburse the card holders before they pay back their creditors. Lawyers, who filed papers on Friday with the US Bankruptcy Court’s Southern District of Manhattan, have chosen to target Borders, saying the bookstore chain didn’t give proper notice that gift cards would be worthless after its liquidation.
The literary store honored gift cards until the virtual end of its liquidation sales in September. And, competitor Barnes & Noble that acquired Borders intellectual property, won’t recognize the purchases. The ramifications are stunning. If the class action suit is successful, this could lead to potentially hundreds of thousands of similar claims to be filed, despite folks missing the deadline. Millions of dollars may be on the line over this upcoming court decision.
As a result, American Express and a number of national retail companies are re-examining the notion of offering gift cards as a reliable way to entice consumers to shop; especially, if Borders initially loses (attorney appeals are expected to occur). The Manhattan bankruptcy judge will hear the case on June 13th.
Bulletins as they break…
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