The struggling Penn Camera chain has reversed an earlier decision to refuse gift cards, the owner told NBC's Steve Handelsman on Monday.
The store will once again allow customers to use previously purchased gift cards. Its online store lists new gift cards as "out of stock."
In business since 1953, Penn Camera filed for Chapter 11 last week, and is set to close at least five of its eight stores.
The Beltsville-based company had initially said it wouldn't honor outstanding giftcards -- leaving cardholders in the lurch so soon after the holidays.
MrTinDC said over the weekend that he'd appealed to a store employee who recognized him as a regular customer -- to no avail. He tweeted, " @PennCamera Would I be arrested if I grabbed $45 worth of accessories, threw my $50 gift card on the counter, and ran out the door? ;)"
Although Penn Camera has now changed its decision, their initial plan to refuse gift cards was indeed legal.
When a company files for Chapter Eleven bankruptcy protection, federal law allows the company to decide whether it will honor gift cards. The company must prioritize the people to whom it owes money -- for example, it needs to pay its employees -- and consumers usually wind up at the bottom of that list.
Clearance sales are ongoing at Penn Camera's E Street, Tysons and Rockville locations, which include 10 percent off all cameras and lenses and 30 percent off all albums and frames.
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How to Protect Yourself When Buying or Using Gift Cards:
If you purchase a gift card with a debit card or cash, and the company goes bankrupt, you're often out out of luck. If you can, pay for gift cards with a credit card. If something goes wrong, you can call the credit card company to dispute the charge.
You can also consider contacting a store competitor. It may accept the card in hope of gaining new customers.
Even if the company in bankruptcy reorganization is not redeeming cards now, check back later. It may start redeeming the cards at a later date.
Tips from the Federal Trade Commission for buying gift cards include:
- Consider the financial condition of the retailer or restaurant. If you buy a card from a company that files for bankruptcy or goes out of business, the card may be worth less than you had anticipated.
- If the business closes a store near the recipient, it may be hard to find another location where the card can be used.
- A company that files for bankruptcy may honor its gift cards, or a competitor may accept the card. Call the company or its competitor to find out. Even if the company is not redeeming gift cards now, check back with them periodically; they may start redeeming cards at a later date.
