Consumer law firms are working to help shoppers recoup the value of unused gift cards from bankrupt retail chains, hoping to revive court claims that might otherwise be deemed worthless.
Gift-card holders filed proposed class-action claims on Friday in the bankruptcy cases of Lord & Taylor and Sur La Table Inc., seeking priority status for those stuck holding potentially unusable gift cards. At the same time, the law firms representing them are planning to request that the U.S. Trustee, the U.S. government’s bankruptcy watchdog, appoint official consumer committees in the same bankruptcy cases.
“As retailers are lining up to file bankruptcy because of circumstances that really are beyond their control, ordinary Americans are being left in the cold,” said Thomas Burt, a partner at the law firm filing the claims, Wolf Haldenstein Adler Freeman & Herz LLP. “Their values have gone poof, because somebody messed up.”
The litigation firm, along with bankruptcy law firm Sto Helit PLLC, is also seeking class representatives who have unredeemed and unexpired gift cards and gift certificates from Stein Mart Inc. and Century 21 Department Stores LLC, also bankrupt. Each individual holding gift-card claims should get up to $3,025 per person in priority payments, according to the firm.
Bankrupt retailers that are permanently closing their stores could collect a windfall if prepaid gift cards are never redeemed. Roughly $2 billion to $4 billion, or up to 4%, of gift cards typically go unused every year in the U.S., according to research from Mercator Advisory Group Inc.
