Gift cards do not age well

Consuming Interests

November 28, 2006|By Dan Thanh Dang | Dan Thanh Dang,Sun Columnist

When Ellen Brown and her husband rolled up to Dunstin's Steakhouse & Seafood Grille in Highlandtown recently to use a $25 gift certificate for dinner, they found the place locked up tighter than Fort Knox. The doors were closed and there was no sign of life inside - at dinner hour.

"My sister gave me this gift card for Christmas last year," says Brown, a retired secretary who lives in Rosedale. "It said it was good for one year.

"It's only $25, but I was just thinking there are probably other people out there with $25 gift certificates to this place, too," says Brown, who figured that the unspent yuletide gift was as good as gone.

Alas, Brown's gloomy assessment is typically the case. When a business bites the dust, that gift card or certificate you're holding is worth less than Monopoly money. You could try tracking the owners of the business down, but there's no guarantee you will get the value of that scrip back.

In fact, there's surprisingly little protection on most gift cards and gift certificates, despite their growing popularity among givers and recipients.

Shoppers are expected to shell out $24.8 billion on gift cards this holiday season, a 32 percent increase over the 2005 season, according to the National Retail Federation Gift Card Survey. Those of us who give plastic know they make convenient last-minute presents. Also, you're almost guaranteed against re-gifting since you're giving the recipient the opportunity to pick something perfect.

Those of us who pause before giving gift cards know that many come with persnickety rules and, worse, your plastic present might be viewed as oozing as much warmth and thoughtfulness as a nicely wrapped kitchen toaster. Gift cards and certificates leave it up to the recipient to read the rules and follow them carefully.

"When you buy a gift card, you're taking a chance the business will still be there," says Rebecca Bowman, director of the mediation unit for the state attorney general's office. "Nothing is going to protect you if the company where you got the gift card goes out of business or goes into bankruptcy. ... My best advice would be to use them as quickly as possible."

Fortunately for Marylanders, Bowman says, there are some protections. Last year, the General Assembly passed a law that forbids merchants from selling gift cards that expire or diminish in value in less than three years. The law, which went into effect July 1, also says that any fees or expiration after that period must be clearly disclosed.

What that law doesn't do, however, is cover the more popular gift cards purchased at malls or those issued by banks. Hang on to those mall and bank cards too long and they can charge you fees every month until the balance of the card is whittled down to zip.

And bear in mind that no law protects you from a business closure, which brings us back to Brown's $25 gift certificate at Dunstin's.

In this particular case, luck did not completely abandon Brown.

Dunstin's had the great fortune (or misfortune) to call home the space that once housed the legendary Haussner's Restaurant, which meant there was much fanfare about Dunstin's opening and that the name of the owner, James Micklos, appeared a fair amount in local publications.

It didn't take long to track down Micklos in that low-tech contraption we call the phone book.

Micklos said high rent, high energy prices and low interest in a fancy eating establishment doomed Dunstin's. His predecessor may have enjoyed 73 glorious years at the corner of Eastern Avenue and Clinton Street, but Micklos' Dunstin's struggled to make it to six months.

Longevity is not something many new businesses benefit from, sadly. Studies have shown that anywhere from 60 percent to 90 percent of new businesses shut down within the first three years - chew on that before you buy someone a gift certificate to a favorite new shop or restaurant.

In his defense, Micklos offered to honor Brown's gift certificate and added that he put up a sign on the Dunstin's door when he closed up shop that included a number to call for gift certificate holders. Brown says she saw no sign. "If anyone has any gift certificates, please call me and I'll cash it for them," Micklos says. "We're going to reopen Dunstin's at another location on Ponca Street where I have a night club, so the restaurant will be back. It'll just be more casual."

Here's the number, gift certificate holders: 410-440-4453. Micklos wants you to call if you'd like a reimbursement.

Brown says she doesn't want to wait for the new restaurant and prefers cash back. That might be a wise decision since, as The Sun reported a couple of weeks ago, the nightclub ran into a spot of trouble with the city liquor board. Club Malibu had its liquor license suspended for 45 days and Micklos was fined $4,800 for failing to maintain a safe and orderly establishment, as well as other health and administrative violations.

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