Bankrupt electronics retailer RadioShack has agreed to pay holders of its unredeemed gift cards 100% of the value of the cards, according to a press release from New York Attorney General Eric T. Schneiderman.
Attorney General Eric T. Schneiderman today announced that his office has reached a settlement in principle with RadioShack that will pay holders of unredeemed gift cards that were purchased by consumers at 100% of the value of their cards. The agreement applies to gift cards purchased from RadioShack or other merchants who sold RadioShack gift cards and applies to consumers nationwide. The settlement does not impose a minimum dollar threshold for consumer claims and is supported by the Attorneys General of Texas, Pennsylvania, Oregon, Tennessee, and New Hampshire.
The Associated Press reports that about $46 million worth of cards would be repaid, but those with promotional cards, cards given for returns, and those given for customer service complaints would need to get in line with the rest of the creditors. (Read that store here)
Of course, the agreement still needs to be approved by the bankruptcy court. In the past, the court has allowed retailers such as Borders Books to honor their gift cards, but did not force a pay out of the value of the cards. For a retailer, having the cards redeemed can give it funds to help pay off other creditors.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
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