An agreement between RadioShack and New York Attorney General Eric T. Schneiderman will preserve the value of many gift cards held by consumers nationwide. The electronics chain's bankruptcy had left the value of the cards in question.
“Businesses must honor their commitments to consumers, and that includes consumers who have purchased gift cards,” said Schneiderman. “We will ensure that debts owed to consumers across New York and across the country are a top priority in RadioShack’s bankruptcy proceedings.”
The agreement provides that RadioShack 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.
If the settlement is approved by the Bankruptcy Court, consumers will have 12 months after RadioShack’s plan of liquidation becomes effective to file a simplified proof of claim form that will be available online or by mail. The exact notice procedures are still being negotiated by the parties.
An escrow account with $500,000 will be established so that the first half million dollars’ worth of qualifying unredeemed gift card claims will be paid promptly and will not be delayed in the bankruptcy process. In the event that qualifying gift card claims exceed that amount, additional funds will be provided.
Gift cards that were issued as promotional giveaways, offered for store credit on returns, or otherwise not paid for by any consumer may not receive priority status under the agreement.