What happens to gift cards with balances if I close my business?

[sweetbakeco]

We are considering closing our business, but we may have gift cards with funds still on them previously purchased by customers. What happens to the balances on those gift cards if we close our business? 

[Ron · Accepted solution]

Most companies that close their business and have outstanding gift cards not redeemed advertise the fact that they are closing and the gift cards must be used before a certain date (usually the date of closing). You can put a sign up at your business and / or advertise the fact in your local newspaper, Facebook and Twitter are another good way to let your customers know.

[VanKalkerFarms · Accepted solution]

The money for the gift cards has already been deposited into your account, so you have it already as an unsecured loan from your customer.  So whats showing on their balance is what you owe them. depending on your state there may be specific laws on what you have to do as to who gets paid first between creditors etc.  

But basically, it seems to be on the store to honor them till they close unless the bankruptcy court says differently.  Because the Gift card is an unsecured loan it may just be yours to keep once you close your doors.  

Best to check with your lawyer to see what needs to be legally done.

https://www.giftcards.com/gcgf/giftcards-in-bankruptcy

https://www.giftcards.com/gcgf/giftcard-chapter11-watchlist

[Ron · Accepted solution]

Most companies that close their business and have outstanding gift cards not redeemed advertise the fact that they are closing and the gift cards must be used before a certain date (usually the date of closing). You can put a sign up at your business and / or advertise the fact in your local newspaper, Facebook and Twitter are another good way to let your customers know.

[VanKalkerFarms · Accepted solution]

The money for the gift cards has already been deposited into your account, so you have it already as an unsecured loan from your customer.  So whats showing on their balance is what you owe them. depending on your state there may be specific laws on what you have to do as to who gets paid first between creditors etc.  

But basically, it seems to be on the store to honor them till they close unless the bankruptcy court says differently.  Because the Gift card is an unsecured loan it may just be yours to keep once you close your doors.  

Best to check with your lawyer to see what needs to be legally done.

https://www.giftcards.com/gcgf/giftcards-in-bankruptcy

https://www.giftcards.com/gcgf/giftcard-chapter11-watchlist

[EJ_ · Accepted solution]

Thank you both for the great responses @VanKalkerFarms @Ron

@sweetbakeco Hopefully one of the responses provided helps, however, depending on when the Gift Card was purchased you can also issue your customer a refund for the original transaction. 

You'll want to make sure you clear the gift card balance as well. 

[The_White_Hart]

Anyone know the best way to handle outstanding Square gift cards if/when a business closes? I imagine the laws vary by state, but what's the suggested process?

I can't simply refund the cards' balances, since most card purchases were more than 60 days ago. Nor can I call or email purchasers, since that information is not available to me. Any suggestions on how I can make good with these customers and not be a jerk? 

[Helen]

This reply was created from merging an existing thread: Outstanding gift cards after closing business

I've merged your post in to this thread @The_White_Hart. I'm sorry to hear you might be closing a business. If that happens, I think the replies above will help you.

[The_White_Hart]

Thanks for locating the thread for me. For what it's worth, my business isn't going brankrupt nor is it short of funds. We're closing because we want to, and we'd prefer to refund any customers' outstanding gift cards -- if we can contact them. Based on the above suggestions, we'll post a notice on our website, Facebook, etc. and invite customers with gift cards to contact us directly for a refund. There doesn't seem to be any other way. Thanks. 

[Home]

What happens to untransferred money when I close my account? Square is not a viable option for me I find out after just my second transaction they suspended transfers and deposits..

[Ekramkedir]

heyy, if you transfer money to closed bank there is a possibly it might still go through some banks accept informing funds even after the account closed if they reject it i think it will be bank on your square account