BBB Offers Tips for Consumer Affected by Store Closings

  
     
September 24, 2009

RALEIGH, N.C. (September 2, 2009)― Better Business Bureau serving Eastern North Carolina (www.bbb.org) has received numerous inquiries from local consumers left holding unused gift certificates to Iatria Day Spa since the company closed its doors on Monday, August 31, 2009.

One Raleigh consumer complained to BBB after paying $600 for a monthly membership on Saturday, two days before the company closed. Many other consumers called BBB to inquire about getting their money back for gift certificates worth hundreds of dollars. BBB has received over 1200 inquiries about Day Spas alone in the past 12 months, and over 50 inquiries about Iatria Day Spa since January of 2009.

As a result of the declining economy, the number of retailers closing their doors has increased substantially. Shoppers are left wondering what will happen to goods they haven’t received, gift cards and outstanding warranties.

Iatria Day Spa was one of those businesses left struggling with the current economic state, and made the decision to close all three locations in Raleigh and Cary this week. Manager, David Mangrum attributed their downfall to economic difficulties they fought, but were not able to overcome.

R.O.I. Salon in Raleigh has offered to honor gift certificates from the now-closed Iatria Day Spa. The specific service offered on the certificates is not an issue; R.O.I. will exchange the dollar amount for their services including hair, nails and skin care. Consumers can contact R.O.I. Salon at (919) 833-2577‎.

BBB offers the following suggestions for consumers left with a gift certificate from a company that has closed:

  • If you pay for a gift certificate by credit card, and the charge has not already been made to your account, you can dispute the charge through your credit card company before the out-of-business firm actually receives its money for the sale. Check with your card issuer right away.
  • If you are left holding a gift certificate of a business that declares Chapter 11 bankruptcy, courts will decide if the business must honor gift cards or certificates. If the business has filed Chapter 7 bankruptcy, the holder must file a claim. In some cases, consumers might actually get at least part of the value of the gift card back. Some retailers have tried wooing new customers by accepting a bankrupt competitor’s gift card – but this is generally a rare circumstance. BBB advises that consumers redeem gift certificates as soon as possible in order to avoid any headaches with bankruptcy files and court actions.
  • Consumers can file a complaint with the North Carolina Attorney General’s Consumer Protection Division by calling 1-877-5-NO-SCAM or by filling out a complaint form online at www.ncdoj.gov.
  • Check out the company at www.bbb.org If BBB is aware of any bankruptcy or licensing problems, it will be included in the BBB’s Reliability Report for the business.
  • In the future, before purchasing a gift certificate or gift card, consider the following:
    • Can the card or certificate be redeemed online?
      • Does it have an expiration date?
      • Check the 800 number on the back to see what the current balance is (BBB has heard horror stories about scammers getting information off the back and stealing the card from right under the gift giver and receiver).
      • Ask if it can be redeemed by another retailer if something should happen to the store on whose name it is offered.
      • Some gift cards start accruing service charges after a certain period of time, so read the fine print.

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