The GiftCardRescue gift card exchange site is shutting its doors.
The site rose to prominence when featured on SharkTank a good few years back. Although the deal brokered on the show didn’t pan out, they became one of the original, well-known exchanges.
Over the past year or two, many have been having problems with their site paying out, and some blogs even warned against using their site.
Via Willrunformiles, there’s a letter that was sent out from the CEO of Giftcardrescue to sellers indicating that the site has closed down as of July 15, 2016. The letter goes on to say that those who sold cards to the site recently and are still owed money probably won’t be paid since the bank accounts got frozen due to litigation.
In a letter to gift card bulk suppliers today, Kwame Kuadey, CEO & Founder of GiftCardRescue.com said:
You are receiving this letter because you or your company sold gift cards to GiftCardRescue.com recently and are awaiting payments on those gift cards.
Unfortunately, I regret to inform you that GiftCardRescue.com has closed down effective July 15, 2016. Our company was forced to shut down last week when a lender to the company (with whom we have been trying to negotiate a temporary forbearance) went to court and got a judgment against our company. With that judgment, they placed a hold on our business bank account, depleting all the funds in our account. Without access to our operating account, we had no choice but to shutdown…As soon as it became clear we could no longer operate, we stopped accepting new gift cards and have since returned all unprocessed gift cards to the respective suppliers. . .
I am sure you are wondering what will happen to the debt owed to you by GiftCardRescue.com. While I have pursued all efforts to find a way to pay the
amounts owed to you, or to have another company in the secondary gift card industry assume and pay the obligations owed to you as part of a transaction, at this point my efforts have not been successful. If this circumstance changes, you will receive further communications to ensure you are properly advised. . .
I would like to thank you for trusting us with your business and regret that we were not able to send you payment for the cards you sold to us.
When you go to the site itself and attempt a sale, the system shoots up with an alert that they aren’t accepting sales or purchases. Yet, when attempting a purchase, it seems to allow it. This makes sense since they’ll have to liquidate whatever merchandise they have left.
It’s a bit odd that they are defaulting on their debts to sellers since you’d think that the sale of the cards should more-or-less let them break-even and pay their sellers, but I guess there’s an issue here of snowballing debt from overhead costs or interest charges on loans they took.
In the end, we wish best of luck to anyone is owed money from them. We can only hope that they’ll find a way to pay back the debts from the sale of their current inventory, but for now, the CEO says he hasn’t found a way to make that happen.
The moral of the story is that there’s always risk in dealing with gift card exchanges, especially on the selling end since you don’t have any credit card protections there. Check out our Complete Guide to Selling your Unwanted Gift Cards for a list of sellers who seem reputable.