GiftCardRescue Shuts Down and Sellers Lose

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.

https://www.youtube.com/watch?v=-WB_rc48IDw

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.

 

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MC
MC

i don’t actually understand why this is legal

the company has not filed for bankruptcy, they just took our assets and said they don’t plan to pay… what is happening here, and why can’t anyone do anything about it?

frankie
frankie

What about the people on shark tank who invested in this project. Where do they stand in this/

Kelli ODonnell
Kelli ODonnell

I found this address for him because he was arrested for using a cell phone while driving.

They can contact him here!

Alex
Alex

The Maryland Attorney General sent me a letter saying they cannot locate GC Rescue and therefore can’t do anything. UGGGGGHHHHHHHH Is there any other legal sources we can get help from? Or is this an absolutely lost case? Has anyone got help from SVM?

TJ
TJ

Anyone heard anything so far?

H. L.
H. L.

Thank you so very much for directing us victims to legal help. I have submitted my case online on 8/3 and mailed in the screenshot as proof. Calling them up today revealed that the case is much more complicated than what they normally handle, and they are collecting many complaints together before further action. The wait time on the phone was not long and the representative was very professional. I was instructed to call back if I don’t hear from them by 9/6/16. The officer responsible for this case is Jean Celtnick, and she can be reached at 410-576-7211. I strongly urge you to file a claim (via the link in the post) with Maryland Attorney General office to make our voice louder. They are my only hope now after SVM refuses to deal with the Gift Card Rescue case and Better Business Bureau never responded to me (which makes sense if GCR is “out of business”)

embe
embe

It looks like the bank that seized GCR’s bank accounts is The Columbia Bank, which is a subsidiary of publicly traded Fulton Financial Corporation.
http://casesearch.courts.state.md.us/casesearch/inquiryDetail.jis?caseId=06C16071733&loc=61&detailLoc=CC

Kwame Kuadey claimed that the bank now owns the company (though this seems to contradict OAG’s comment): “If there was a pot of money to distribute, we would,” he said. “I’m in a waiting mode. Lenders own the business and get to decide what will happen.”
http://www.baltimoresun.com/business/bs-bz-giftcardrescue-shuts-down-20160722-story.html

The article above says only ~100 sellers have not been paid (seems underestimated judging by this blog alone) but I wonder if there is some way we can reach out to Columbia Bank and convince them to repay this group…

K
K

Hey everyone,

Don’t give up hope just because they have an LLC. LLCs can be pierced if they aren’t run properly and judging by how stupid this guy is, I’d say there’s a great chance it wasn’t.

Also note that Gift Card Rescue LLC is currently NOT in official good standing with the state of Maryland:

http://sdat.dat.maryland.gov/ucc-charter/Pages/CharterSearch/default.aspx

This very well may have forfeited their legal existence meaning the LLC protection wouldn’t even be there to pierce.

Further, if you are owed money, continue to contact the Maryland Attorney General regarding your situation. The more attention Gift Card Rescue and Kwame Kuadey receives, the better.

I wish you all the very best.

John K
John K

If you are owed money or cards from Giftcardrescue.com, file a complaint with the Maryland Attorney General’s office.

I found this news article about a week ago: http://www.wbaltv.com/news/columbiabased-gift-card-resale-business-owes-customers-13000/40835694

Based on this I emailed the Maryland OAG. Today I received this response:

“Please be advised that the business is not out of business. Despite this, you should file a complaint with our office as they are working with our office to try to either return gift cards or refund monies to as many persons as possible and this will allow our office to follow up on your complaint. To file a complaint, simply go to the website at http://www.oag.state.md.us and choose the option on the right hand side for File a Consumer Complaint. This will lead you to instructions on how to file a complaint. The complaint forms are on the left hand side. A General Complaint form should be used. ”

I filled out an online complaint form, which in other correspondence they stated was acceptable. They want you to fax or mail your support documentation however.

Fingers crossed.

aloha
aloha

Thanks for the link. GCR owes me $900 payment. I filed the complaint using your link.

Beth
Beth

Just received 2 envelopes of gift cards back in the mail. They have “rejected, return to sender” written across them (this method of returning costs the company nothing in postage and gets the cards back to the senders.) I am still missing the package of $700 of gift cards I sent around the same time as these two orders– but since it was also never marked as received on their website-I’m reasonably hopeful it will come through too. Thanks to you guys I know not to bother trying to deposit the check for my only other transaction with them that they supposedly mailed on July 7th if it ever arrives. What a mess!

Beth
Beth

follow-up: received the last of my orders–a package of $700 worth of gift cards marked return to sender came home to mama today.
These 3 separate orders were never listed as “received” on the website. I hope others are getting theirs back too.

Tobias Kaplan
Tobias Kaplan

I never got a check for gift cards I sold back in May, nor did the cards get returned. They stated that 4/6 of the gift cards I sold were “going to expire in September” so they couldn’t buy them (they were BP Gas gift cards so obviously there is no expiration). I sent them an envelope through their convoluted returns process and they didn’t send the unaccepted ones back.

Anyone think there’s merit in a class action? Not sure what we’d get from them since they are going out of business but I’m extremely pissed off. It’s not a ton of money that I’m missing but it’s entirely unacceptable to conduct business the way these guys do/did

Tony
Tony

Nope – tough luck. You knew the risks of going into gift card reselling and unfortunately this one didn’t pan out. Lesson learned – time to move on.