Local restaurant refuses to honor gift cards!

[Moses]

I have $300 worth of gift cards to a local fine restaurant. They aren't terribly old, and gift card cannot expire in California. It's the law. I called to make reservations and they asked if I was planning to use a gift card. I said yes. They said gift cards issued before April 2010 would not be honored because the restaurant changed ownership.

I suggested that the new owners may have forgotten to negotiate outstanding gift cards as a liability during the restaurant purchase, but I was pretty sure that wasn't MY problem. By the way, this is a hugely successful local restaurant. Great food. Always busy.

What shall I do, Pelicans? I'm considering running up a huge bill then leaving the gift cards as payment anyway. Might even invite them to call the sheriff if they wish to have me arrested.

I hate thieves, by the way.

[m21sniper]

I would go and eat and then use the cards to pay if you want to stand on principal, no matter the fuss.

I would personally just throw them out, and trash the restaurant to everyone i knew, anytime i ever heard it's name uttered.

[Noah930]

Letter to the paper? Does the local TV news station have a "consumer reporter" a la David Horowitz?

[onlycafe]

first thing to do is name the restaurant and see if anyone else has gift cards too!
then everybody shows up at the same time, wait a minute, i have a restaurant. never mind.

seriously, if they are a reputable place they should certainly make good on the amount one way or another. offer to use them with fifty percent in cash until the amount is cleared.
at least that way they will not be subject to slagging on the net.

[cgarr]

Try this!

[m21sniper]

"Your wife, and daughters. Sell them to me."

[RWebb]

call the State Consumer Protection agency

[Jeff Higgins]

Originally Posted by Moses

I'm considering running up a huge bill then leaving the gift cards as payment anyway. Might even invite them to call the sheriff if they wish to have me arrested.

I hate thieves, by the way.

Exactly what I would do. For the same reason.

[BeyGon]

Do it, either way you won't be eating there again.

[strupgolf]

Just act dumb. Order some big meals and sides etc. then when it's time to pay, use the gift cards. You didn't know they changed owners, did you? I didn't.

[LeeH]

I'd think that outstanding gift cards would be a liability on the prior owner's balance sheet and would have been considered during the sale of the restaurant.

[stomachmonkey]

Go , eat, use the cards, if issue let them call the police, your gift card has the name of the restaurant on it, not the name of the past or current owner.

Seem to recall that you are close with one of the local DA's or Judges?

Maybe invite them along to dinner.

Or have them on speed dial if the popo show.

[Moses]

Originally Posted by stomachmonkey

Seem to recall that you are close with one of the local DA's or Judges?

Maybe invite them along to dinner.

That's brilliant! My next door neighbor is the D.A. She'll chew them up. THAT will be fun to watch.

[wcc]

I'm NOT a lawyer. But you have gift cards to a restaurant that is still in business and 'it's the law' that they don't expire. Talk to the owner if the manager won't satisfy the issue. Exhaust their management level first before pursing the following:
IMO they either honor the gift cards, return the money to the purchaser or end up in small claims court. I would factor in ALL my expenses for filing, transportation, time off work & any lost income, postage, etc, just to file and add that in there. You may even be able to slip you number of hours spent on their too if it's not crazy. Try half you hourly pay or if nothing else minimum wage and argue you make way more than that and you'll get at least that. It's the law AS YOU SAID and they are breaking it. You could even threaten a call to the DA's office about criminal activity going on at the restaurant. They WILL settle out of court for more then $300 or honor the cards. But just try to be reasonable if they do offer a settlement... Good Luck! This kinda crap pisses me off that's for sure!

[Tidybuoy]

Originally Posted by noah930

letter to the paper? Does the local tv news station have a "consumer reporter" a la david horowitz?

+1

[Zeke]

Letter to the op/ed section of the local paper would be my 1st move. I love that theory that states something like if you have something good to say, it will reach (you know, register in their brain) a dozen people. If it's negative, it reaches 300.

And that's just the word of mouth version.

[vash]

Originally Posted by stomachmonkey

Go , eat, use the cards, if issue let them call the police, your gift card has the name of the restaurant on it, not the name of the past or current owner.

Seem to recall that you are close with one of the local DA's or Judges?

Maybe invite them along to dinner.

Or have them on speed dial if the popo show.

devious!! glad we are friends...(we are friends right?)

[McLovin]

I think it would likely depend on the structure of the sale of the restaurant.

Generally,

In a stock sale, the new owner buys the stock of the old owner. The old corporation (and restaurant) continues to exist, just with a new owner. So the liabilities stay in place.

Many sales are not structured that way, because the new owner doesn't want to take the old liabilities. So it is structured as an asset sale (or similar). The old corporation continues to exist and be liable for its liabilities (it doesn't own the assets anymore, and doesn't operate the business anymore, but it still exists, with the same shareholders). The new guy just buys the assets of the old business, but doesn't assume the liabilities. The new owner is a completely new business. That is done all the time, and is completely legal.

If it was structured as an asset sale, with the new owner not assuming the liabilities, you'd still likely have a claim for the value of the gift card, since by law they can't expire. But your claim would be against the old ownership of the restaurant, who remains liable.

(I don't know if there are any special rules re asset sales and non-assumption of liabilities where there are outstanding gift cards. My out of the blue guess is there isn't).

[McLovin]

So I'd be careful about running up a big bill and refusing to pay it with other than the gift card. You may very well have no legal grounds to do that.

If the restaurant is of any significant size (revenue) I'm sure there were lawyers involved on both sides of the sale transaction. My guess would be this was not an issue that went unnoticed or unanalyzed.

While what they are doing may not be the best move from a customer relations standpoint, I would certainly not assume it is not legally permitted. This thread is a good example of why a little knowledge of the law (and recommendations for conduct based thereon) can be a dangerous thing. If you are planning such a thing, I'd do whatever you have to do to ensure yourself you have the right to do it.

[dentist90]

Kinda like Mc Lovin said, in the sale of a business there are two ways to go. A share sale, which is a continuation of a limited corporation; or an asset sale, which is just buying the tables, chairs and goodwill.
If the restaraunt was sold as an incorporated company the liabilities are assumed by the new owners, and this includes staff liabilities, pending lawsuits and credits (gift cards) issued.
If the restaraunt was sold as an asset sale the sale price would be reduced by any outstanding liabilities.
The way I see it, the new owners cannot (and should not) be allowed to dishonour any gift certificates issued prior to the sale of the business. This should have been calculated into the sale price as an outstanding liability. I believe the new owners have erred in their interpretation of their liability either way.
Maybe speak to the new owner before the dine 'n dash?