Consumer Law
‘Green’ Alternative to Gift Cards May Protect Against Bankruptcy Loss
Posted Nov 10, 2008, 03:49 pm CST
By Martha Neil
It isn't just in an environmental context that going "green" can be considered the best option.
People who have been giving gift cards to those on their holiday shopping lists may want to consider giving greenbacks instead, especially if the cards come from struggling retailers facing potential bankruptcy cases, reports the Los Angeles Times.
Although some state lawmakers are considering legislation to protect consumers, in many states the gift card holder is considered an unsecured creditor and is likely to wind up a loser if the store goes bankrupt, the newspaper explains. And even in states that do provide gift card protection, "state laws, including one in California, have proved ineffective in protecting gift card holders in bankruptcies," the article continues, citing as its source Anthony Giorgianni, who is an associate editor of Consumer Reports.