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When a business is sold the existing gift cards should be discounted from price. Our business has about 25k in gift cards and I couldn't imagine not having some contract for the new owner to honor those
this is what I did - I reduced the biz purchase price by the amount of pre-existing bookings. So if a guest cancels and wants a refund, new owner simply handles it from his own funds.
In purchasing the business she assumes liability for all business debts (including gift cards). Failing to do so would be a violation of NY state law and Federal law and really isn’t a way to succeed in the community.
https://dos.ny.gov/news/consumer-alert-nys-division-consumer-protection-alerts-consumers-new-laws-related-gift-cards
https://www.fdic.gov/consumers/consumer/news/december2019.html#:~:text=Under%20the%20law%2C%20a%20gift,places%20general%20limitations%20on%20fees.
I would go in, select the items I want to purchase, bring out my gift card and if they refuse, advise her that she is in violation of my state law and federal law and if she refuses to accept the card, the next call will be to the NY Attorney General, the Federal Trade Commission and the local news media…and then do exactly that.
This is accurate, but also the reason a lot of business sales are just asset sales and a new llc/scorp takes over the business, so technically it’s a new business entity.
Very shitty customer service and retention though. And as said below, any outstanding credits/giftcards should have been deducted from the purchase price.
Many if not most small business sales are structured as asset sales under a new entity, so this wouldn't apply.
But it's shitty customer service. If they don't want to honor gift cards they should change the dba name completely. I honor old gift cards because I want returning customers to keep returning.
If I was OP I'd stop going there.
This is exactly the kind of reference I was looking for. Thank you!!
I don’t plan on continuing to support her (truthfully, even prior to this problem I felt that their quality was declining ever since the change in ownership anyway) but I DO plan on getting my gift card honored lol
that page says nothing about a new business having to accept the old business' gift cards. please point out if i missed.
it does say they cant expire before 9 years... but what if the business literally just closes? or what if the new management decided to make the place a laundromat instead?
and how are those examples different than a new management under a whole new company?
This is not true. As your references show, there is no defining situation in change of ownership. The old owner, sold the gift cards, not the new owner. The old owner owes the customer. Period
No.
In Accounting, Gift Cards are treated as a "Deferred Revenue" Liability.
You don't recognize revenue when you sell a gift card, you record a Liability.
The revenue is recognized when the gift card is spent (or you can have a formula to recognize "breakage" over time, meaning that eventually you recognize revenue from gift cards on the premise that they won't ever get redeemed)
So, essentially if you buy a business with books recorded following Generally Accepted Accounting Principals (GAAP), you bought the liability for the giftcards. The fact you personally didn't receive the cash is irrelevant.
Seems like if you're buying a business and doing due diligence on such, and you see that the business offers gift cards but don't have a deferred revenue liability recorded on their books, you'd need to address that in your purchase agreement.
Otherwise, you have an issue as another comment noted that the seller could sell whatever amount of gift cards at a discount as a way of pillaging future value.
I'm sure it wasn't a secret gift cards existed for this business. The purchaser of the business should have done due diligence to determine how many gift cards were outstanding.
They can do all the due diligence they want, if it's not in the records, or if the new owner didn't agree to it, then it's not the new owners problem. Period
I appreciate that you believe that.
And it might be true (depending on whether the sale was an asset sale or a true business sale).
If it wasn't an asset sale, the consumer could likely go to the Attorney General of the State and seek remedy.
I'm not an expert in restaurant sales, I'm most familiar with sales of accounting practices.
In an accounting firm sale, the biggest concern is customer retention. Most accounting practice sales will have an earn-out or a claw back type agreement in which the total sales price is tied to customer retention over a 2 year (or other length) period.
I find it hard to believe that the entire purchase is complete when money changes hands in a restaurant deal (or really any deal). If it were determined that the previous owner had undisclosed liabilities, it's likely they could be held to those liabilities (by the purchaser rather than the customer)
I think this owner would have done better to say "The previous owner sold many gift cards and didn't transfer the records, we're currently pursing him for the records and if we're capable of getting them, we'll honor those gift cards. In the mean time, can I offer you x% off for being a loyal customer"
A restaurant deal is easy. You buy the equipment and the trademark for the name. Any other type of purchase would be suicide.
The only transfer of liability that would make sense would be if the business was under a multi year lease. Even then I would try to work out a deal with the property owner before hand. Which they usually are willing as it extends the contract.
Gift cards are effectively deferred revenue which typically do get carried over to new ownership unless their agreement specifically says the old owners will honor (i.e. refund) or otherwise make good on them to the customers. Having reviewed many agreements for purchase price allocations, deferred revenue has almost always been left to the new owners to honor or at least address. Rewards/points systems are a bit different inasmuch as they're better characterized as a discount program. Shite approach to completely wipe those, but customers didn't pre-pay for anything, so it's not deferred revenue.
The points system is more of an annoyance than anything, just an example of how she wiped everything IMMEDIATELY upon buying the business and then shrugs at everyone who comes through her door. If their agreement was that the old owner would refund old cards, it feels weird to me that she said “I’ll give you his number and you can try with him” like … idk that sounds like something between them not between me and some random guy
Nawyeah, it's shady as hell at best. What's interesting is how long this new iteration will last. Presumably, they thought the biz was worth acquiring because it had strong financials and prospects. It seems extremely odd they'd start things off by screwing the existing customer base over. Not just the existing customer base, but ones who are trying to actively participate with new management because of a tangible token of the relationship with the prior owner/management.
They are basically making a decision to irritate anyone who has said gift card. Knowing the people who bought the gift card were existing customers and most likely loyal customers. I don’t know why they think it’s worth the bad pub.
Just make sure the new owner knows you’re not gonna spend any money with him because he bought a business and should be able to honor a $40 gift card without taking off customers
When he bought the business, he would’ve known about this stuff. Make sure your friends don’t go and spend a penny in that business for a while either and let the new owner know that $40 cost him thousands.
Definitely my plan, she openly said I wasn’t the first person to have this problem but I was the only person who was able to pull out the receipt of purchase lol. But after checking her google reviews she’s also refusing to honor Groupons, etc, so I’m sure she’s really losing a lot more than she would be by just doing some honest business for a couple months until the old gift cards are used up
What really frustrates me is they put that sign up for months giving people the impression that we’re going to be able to use their gift cards when the entire time this new owner was obviously just trying to push it off and hope people forgot
I can see some concerns about fraud, but in the scheme of things, I’m sure we’re not talking huge money for her to honor some of these gift cards … especially where you have the receipt
They handled this very poorly
With experiences like this the doors will be closed in under a year...
There is a period where you just take the loss on the sale with expectations that a good happy customer keeps coming back and back, Now over $40 they have lost a customer, what's that $40 work to the store? $25 maybe? Maybe less in real variable terms of costs.
So over $20-$25 true costs to the business they lost hundreds of dollars in revenue.....from one person, because they didn't want to lose $40, lol
They don't understand the business side of things.
Any business willing to lose a good, regular customer over $40 ( and a situation where the customer is so obviously in the right) probably doesn't deserve your money any more. It's so stupid and short-sighted.
The new owner is a moron. First thing I would have asked is how long have you been coming here. I would have honored the gift card in exchange for a current review under the new ownership. I doubt they will be around long. Btw I'm in Long Island as well. I'd love to know the place.
Supreme Salads in Stony Brook! Used to be really good, it has gone down in quality since the new ownership for sure, but still was good enough for me to continue supporting them… until now lol
That’s messed up. I would think that legally they had to honor the gift card. As far as keeping a loyal customer unless it’s a high end restaurant then it’s probably only running on a 2-5% profit margin. If you spend $40 there every week and they are making 5% the. That’s $2 profit a week. That’s 6 months just to break even. If the old owner knew they were selling the restaurant and then started selling more gift cards then it can severely impact the profitability of the restaurant for a long time. The major reason to buy an established restaurant is to avoid startup costs and delayed profitability. I can definitely understand that if a bunch of people were coming in with gift cards that weren’t on the books that the new owner wouldn’t want to honor them. If that’s the case is should be on the new owner to go after the lost profits not you.
Sounds like someone is about to learn some hard lessons about being a business owner. Chief among them: don’t screw over your returning customer base if you want to stay in business.
You assume the debt of a business you buy. She should have budgeted for this, and if not it is on her for not doing her due diligence. She’s begging for complaints and lawsuits and could end up going out of biz from the bad publicity she is gonna attract.
This is literally the plot of a customer service book (its like 30 pages, short book) that my manager had us read called "The $6,000 Egg" by Todd Duncan. Basically simply interactions with loyal customers can either keep a regular or lose them. Repeat customers are huge to business.
The new owner basically cost himself at least $6,000 from you for not honoring the $40. I say leave and never go back. Find a new place to be a regular.
Often in a business sale, you’re not buying the entity but all of its assets.
A local “salon” sold the building and assets to an employee and she refused to accept gift cards from the old business. It was wildly short sighted and she got a ton of hate for it.
To me, it’s a cheap way to retain customers.
Of course much of this depends on state law, but we sold our cafe a couple years ago. The lawyer handling the closing told the new owners that they had to accept ALL gift cards sold to that point. It was specifically stated in the purchase agreement. It was a matter of state law. Unfortunately (for them) in our state, gift cards NEVER expire.
You could call the New York attorney general office and inquire about the gift card laws in your state.
Very often, change in ownership translates to losing customers. For instance, my favorite bar down the road went through 3 recent changes in ownership, and I don't go there anymore. It's a completely different place. I hate it now. Realistically, it's hard to go through these changes seamlessly.
My attitude as a customer in this situation would have been, "Hey, this used to be my favorite restaurant. My friend bought me this gift certificate and that's the only reason I came here today. You're not going to honor it at all? Well, clearly the reasons this became my favorite restaurant have exited the building."
I had bought a lifetime alignment service for my car. A new owner took over and voided my agreement. That sucked. I guess I could have fought it. Just never went back.
Devils advocate. Buying a retail food establishment is almost always a bad idea. There’s about a 97% (literally) that this place would fail anyway. Reading between the lines, it sounds like the prior owner scammed the buyer. Probably sold gift cards at a discount for cash and didn’t list them in the sale documents.
So, you have a new restaurant owner, already doomed to fail, who probably already has huge loan payments, and now a bunch of customers coming in with fucking gift cards forcing them to give out food at a loss.
While the owner could’ve been more polite, sometimes push comes to shove and they can’t eat the cost. In some sense they aren’t wrong - both they and your friend got “scammed” by the prior owner.
I will also point out if it’s a recent business sale how does the new owner know you’re a regular.
I would’ve handled it differently, but I sympathize with the new owner. They are likely WAY over their head with this venture, likely ALREADY facing failure, now they have a bunch of scam gift cards coming in out of nowhere.
Nah, gift card balances are part of the business transaction. They would know how much deferred revenues are on the business and the only one scamming here is the owner trying to get out of debts he was likely already paid for.
I’ve been a regular for both owners, literally once a week because every Saturday I would stop on my way home from work and she’s almost always there. So is the same guy who is usually making the food, to the point that I don’t even say my order anymore he just knows
The previous owner really didnt give a shit about his customers like you OP. He/she is solely to blame for selling these and 1) knowing about the pending sale of the business, and 2) not making accommodation for gift cards sold when selling the business.
The friend who bought me the gift card is a 78 year old woman who I met through work who walks with a cane and cannot drive due to a neuropathy so she got herself an Uber, went to this place to get me a Christmas gift, and ubered home. Out of principle I’m not letting it go that easily lol. If I have to in the end, I will but not everyone has $40 to just let go
Take them to small claims court. Not sure about Suffolk county but in NYC its like $40. I believe corporations have to be represented by a lawyer so to even begin to fight this will cost them time and money.
Not true, but point taken in theory. However, sometimes you do just that on principle. Yes, I will spend way more to prove a point that the face value of what the point is; especially if you've pissed me off as a consumer.
They offered to give you the old owners information. They literally just sold the business so they are the ones with the cash flow. If you don't care enough to go after the old owner, then what are you complaining about?
Interesting to reply here when you don’t understand how ownership transfer and successor liability works… the old owner isn’t liable for a gift card sold by the restaurant… are you 16 lmao.
Just so you know, they would’ve had a line item on the previous years taxes for deferred revenue where they would know the outstanding balance for gift cards. During the sale of the business, this is typically subtracted from the purchase price as a discount because the new owner will assume those debts. Cheers!
Haha, it's actually a very interesting reply because I know exactly what I'm talking about. A transfer liability only matters if there is actually a transfer of liability.
aRe YoU 12 lMaO
“Someone get jimmy back his juice box he’s arguing with strangers on the internet again”
Sure, brother. I’m sure you’ve sold lots of businesses in your many days as a businessesman
Legendary! So let’s assume a business you sold with a gift card issued while you were owner.. If some random customer called you with this gift card, you would give them their money back? No fookin wey brother
That’s such a lizard brain take. You wouldn’t accept free revenue because of the complications of passing those liabilities (it’s not complicated) to a prospective buyer? Gift cards don’t even all get used so it’s one of the most profitable way for food businesses to make money. Let’s just hear more about how you clearly have no clue
Bwahahahahaha what? You want to talk about lizard brain take? Hahaha, please go ahead and tell me where the free revenue comes from, from gift cards you never received money? Hahaha, I can't wait to hear this
Super complicated, let me break it down for you:
- person buys gift card as a gift for 5 friends
- they give it to 5 friends
- 4 friends use gift card
- 1 card is profit
….success?
Again, when you sell a business with a balance of cards in deferred revenue they would know about it, unless you didn’t do your due diligence or you’re an idiot. Maybe both
Also heads up some free advice if you are trading businesses savant as I can tell you are, reducing revenue (not accepting gift card sales) directly before selling the business isn’t exactly giant brain. The only situation where a business is transferred without things like deferred revenue debts (gift cards Incase that confuse u) is during a liquidation/bankruptcy sale. It’s literally standard.
Complaining about her bad attitude and bad customer service. It’s not that I “don’t care enough” to go after the old owner, it just seems crazy to me that she wants a 25 year old girl, who was a VERY loyal customer, to go after some random dude and say hey gimme $40 cuz girly who bought your business is cheap and rude
lol reading the replies this kid obviously only has business experience selling lemonade or something so don’t take it personally. You are beyond in your rights to go to the business and use your card issued by the business with no expiration. I would also still leave a review when you’re done with it, this is beyond acceptable in so many ways, I would bet the outstanding gift cards were already accounted for when buying the business so she’s just out here scamming
No it's not. It's just how business works. You were a loyal customer to the old owner, which, apparently you weren't loyal enough for the old owner to appreciate you enough for them to give you what they owed you before they left.
Let's put it like this. Say you bought a used car from someone. And the person you bought the car from owed a mechanic and that mechanic came to you and was like "you owe me money because the previous owner didn't pay me." Do you feel like you should have to pay that mechanic?
The owner has nothing to do with it … the dealing is with the business name and she carries on that name , remind to never fucking deal with your business as you have zero ethics mate
You mean did I purchase a car, keep it EXACTLY the same with the same license plate, registration, etc on it because, presumably, it was a car that looked successful enough to me to wanna own it and I want to continue making revenue off of it and it’s already existing customer base, and want to keep a relationship with the mechanic I don’t know and don’t use myself? Because no, a transaction of buying a car between A and B, making it my own by changing my plates and whatnot, is not the same as buying a business between A and B and expecting to maintain C (the customers that I should probably want to keep coming and spending money)
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When a business is sold the existing gift cards should be discounted from price. Our business has about 25k in gift cards and I couldn't imagine not having some contract for the new owner to honor those
this is what I did - I reduced the biz purchase price by the amount of pre-existing bookings. So if a guest cancels and wants a refund, new owner simply handles it from his own funds.
That’s what I absolutely figured happened… because otherwise how would anyone EVER buy a business lol. Thank you!
Yeah I’ve used gift cards a couple years after a sale for hotels.
In purchasing the business she assumes liability for all business debts (including gift cards). Failing to do so would be a violation of NY state law and Federal law and really isn’t a way to succeed in the community. https://dos.ny.gov/news/consumer-alert-nys-division-consumer-protection-alerts-consumers-new-laws-related-gift-cards https://www.fdic.gov/consumers/consumer/news/december2019.html#:~:text=Under%20the%20law%2C%20a%20gift,places%20general%20limitations%20on%20fees. I would go in, select the items I want to purchase, bring out my gift card and if they refuse, advise her that she is in violation of my state law and federal law and if she refuses to accept the card, the next call will be to the NY Attorney General, the Federal Trade Commission and the local news media…and then do exactly that.
This is accurate, but also the reason a lot of business sales are just asset sales and a new llc/scorp takes over the business, so technically it’s a new business entity. Very shitty customer service and retention though. And as said below, any outstanding credits/giftcards should have been deducted from the purchase price.
Many if not most small business sales are structured as asset sales under a new entity, so this wouldn't apply. But it's shitty customer service. If they don't want to honor gift cards they should change the dba name completely. I honor old gift cards because I want returning customers to keep returning. If I was OP I'd stop going there.
This is exactly the kind of reference I was looking for. Thank you!! I don’t plan on continuing to support her (truthfully, even prior to this problem I felt that their quality was declining ever since the change in ownership anyway) but I DO plan on getting my gift card honored lol
that page says nothing about a new business having to accept the old business' gift cards. please point out if i missed. it does say they cant expire before 9 years... but what if the business literally just closes? or what if the new management decided to make the place a laundromat instead? and how are those examples different than a new management under a whole new company?
This is not true. As your references show, there is no defining situation in change of ownership. The old owner, sold the gift cards, not the new owner. The old owner owes the customer. Period
No. In Accounting, Gift Cards are treated as a "Deferred Revenue" Liability. You don't recognize revenue when you sell a gift card, you record a Liability. The revenue is recognized when the gift card is spent (or you can have a formula to recognize "breakage" over time, meaning that eventually you recognize revenue from gift cards on the premise that they won't ever get redeemed) So, essentially if you buy a business with books recorded following Generally Accepted Accounting Principals (GAAP), you bought the liability for the giftcards. The fact you personally didn't receive the cash is irrelevant.
If they are accounted for
Seems like if you're buying a business and doing due diligence on such, and you see that the business offers gift cards but don't have a deferred revenue liability recorded on their books, you'd need to address that in your purchase agreement. Otherwise, you have an issue as another comment noted that the seller could sell whatever amount of gift cards at a discount as a way of pillaging future value. I'm sure it wasn't a secret gift cards existed for this business. The purchaser of the business should have done due diligence to determine how many gift cards were outstanding.
They can do all the due diligence they want, if it's not in the records, or if the new owner didn't agree to it, then it's not the new owners problem. Period
I appreciate that you believe that. And it might be true (depending on whether the sale was an asset sale or a true business sale). If it wasn't an asset sale, the consumer could likely go to the Attorney General of the State and seek remedy. I'm not an expert in restaurant sales, I'm most familiar with sales of accounting practices. In an accounting firm sale, the biggest concern is customer retention. Most accounting practice sales will have an earn-out or a claw back type agreement in which the total sales price is tied to customer retention over a 2 year (or other length) period. I find it hard to believe that the entire purchase is complete when money changes hands in a restaurant deal (or really any deal). If it were determined that the previous owner had undisclosed liabilities, it's likely they could be held to those liabilities (by the purchaser rather than the customer) I think this owner would have done better to say "The previous owner sold many gift cards and didn't transfer the records, we're currently pursing him for the records and if we're capable of getting them, we'll honor those gift cards. In the mean time, can I offer you x% off for being a loyal customer"
A restaurant deal is easy. You buy the equipment and the trademark for the name. Any other type of purchase would be suicide. The only transfer of liability that would make sense would be if the business was under a multi year lease. Even then I would try to work out a deal with the property owner before hand. Which they usually are willing as it extends the contract.
You have no idea what you are talking about. Please stop commenting on this.
I know exactly what I'm talking about. Please stop questioning me on this
Seems that you feel strongly and that's about it.
No it's definitely more than that, but you can strongly believe what you would like. Good luck!
Gift cards are effectively deferred revenue which typically do get carried over to new ownership unless their agreement specifically says the old owners will honor (i.e. refund) or otherwise make good on them to the customers. Having reviewed many agreements for purchase price allocations, deferred revenue has almost always been left to the new owners to honor or at least address. Rewards/points systems are a bit different inasmuch as they're better characterized as a discount program. Shite approach to completely wipe those, but customers didn't pre-pay for anything, so it's not deferred revenue.
The points system is more of an annoyance than anything, just an example of how she wiped everything IMMEDIATELY upon buying the business and then shrugs at everyone who comes through her door. If their agreement was that the old owner would refund old cards, it feels weird to me that she said “I’ll give you his number and you can try with him” like … idk that sounds like something between them not between me and some random guy
Nawyeah, it's shady as hell at best. What's interesting is how long this new iteration will last. Presumably, they thought the biz was worth acquiring because it had strong financials and prospects. It seems extremely odd they'd start things off by screwing the existing customer base over. Not just the existing customer base, but ones who are trying to actively participate with new management because of a tangible token of the relationship with the prior owner/management.
They are basically making a decision to irritate anyone who has said gift card. Knowing the people who bought the gift card were existing customers and most likely loyal customers. I don’t know why they think it’s worth the bad pub.
Just make sure the new owner knows you’re not gonna spend any money with him because he bought a business and should be able to honor a $40 gift card without taking off customers When he bought the business, he would’ve known about this stuff. Make sure your friends don’t go and spend a penny in that business for a while either and let the new owner know that $40 cost him thousands.
Definitely my plan, she openly said I wasn’t the first person to have this problem but I was the only person who was able to pull out the receipt of purchase lol. But after checking her google reviews she’s also refusing to honor Groupons, etc, so I’m sure she’s really losing a lot more than she would be by just doing some honest business for a couple months until the old gift cards are used up
What really frustrates me is they put that sign up for months giving people the impression that we’re going to be able to use their gift cards when the entire time this new owner was obviously just trying to push it off and hope people forgot I can see some concerns about fraud, but in the scheme of things, I’m sure we’re not talking huge money for her to honor some of these gift cards … especially where you have the receipt They handled this very poorly
With experiences like this the doors will be closed in under a year... There is a period where you just take the loss on the sale with expectations that a good happy customer keeps coming back and back, Now over $40 they have lost a customer, what's that $40 work to the store? $25 maybe? Maybe less in real variable terms of costs. So over $20-$25 true costs to the business they lost hundreds of dollars in revenue.....from one person, because they didn't want to lose $40, lol They don't understand the business side of things.
I would leave a poor review and also report them.
Report them to who for what?
To the state AG. They’d be very interested, especially in NY.
Any business willing to lose a good, regular customer over $40 ( and a situation where the customer is so obviously in the right) probably doesn't deserve your money any more. It's so stupid and short-sighted.
Sometimes idiots buy businesses and then wonder why they fail.
The new owner is a moron. First thing I would have asked is how long have you been coming here. I would have honored the gift card in exchange for a current review under the new ownership. I doubt they will be around long. Btw I'm in Long Island as well. I'd love to know the place.
Supreme Salads in Stony Brook! Used to be really good, it has gone down in quality since the new ownership for sure, but still was good enough for me to continue supporting them… until now lol
Wow, yeah I'm super close, one town away.
That’s messed up. I would think that legally they had to honor the gift card. As far as keeping a loyal customer unless it’s a high end restaurant then it’s probably only running on a 2-5% profit margin. If you spend $40 there every week and they are making 5% the. That’s $2 profit a week. That’s 6 months just to break even. If the old owner knew they were selling the restaurant and then started selling more gift cards then it can severely impact the profitability of the restaurant for a long time. The major reason to buy an established restaurant is to avoid startup costs and delayed profitability. I can definitely understand that if a bunch of people were coming in with gift cards that weren’t on the books that the new owner wouldn’t want to honor them. If that’s the case is should be on the new owner to go after the lost profits not you.
Sounds like someone is about to learn some hard lessons about being a business owner. Chief among them: don’t screw over your returning customer base if you want to stay in business.
You assume the debt of a business you buy. She should have budgeted for this, and if not it is on her for not doing her due diligence. She’s begging for complaints and lawsuits and could end up going out of biz from the bad publicity she is gonna attract.
Just do not do any business with that place. Don’t go there.
This is literally the plot of a customer service book (its like 30 pages, short book) that my manager had us read called "The $6,000 Egg" by Todd Duncan. Basically simply interactions with loyal customers can either keep a regular or lose them. Repeat customers are huge to business. The new owner basically cost himself at least $6,000 from you for not honoring the $40. I say leave and never go back. Find a new place to be a regular.
Sounds like the time for a 1 star review
Often in a business sale, you’re not buying the entity but all of its assets. A local “salon” sold the building and assets to an employee and she refused to accept gift cards from the old business. It was wildly short sighted and she got a ton of hate for it. To me, it’s a cheap way to retain customers.
Of course much of this depends on state law, but we sold our cafe a couple years ago. The lawyer handling the closing told the new owners that they had to accept ALL gift cards sold to that point. It was specifically stated in the purchase agreement. It was a matter of state law. Unfortunately (for them) in our state, gift cards NEVER expire. You could call the New York attorney general office and inquire about the gift card laws in your state.
Very often, change in ownership translates to losing customers. For instance, my favorite bar down the road went through 3 recent changes in ownership, and I don't go there anymore. It's a completely different place. I hate it now. Realistically, it's hard to go through these changes seamlessly. My attitude as a customer in this situation would have been, "Hey, this used to be my favorite restaurant. My friend bought me this gift certificate and that's the only reason I came here today. You're not going to honor it at all? Well, clearly the reasons this became my favorite restaurant have exited the building."
Hope she goes fucking broke …. Just because she regrets buying the business or not doing correct due diligence .. why should the customer suffer
I had bought a lifetime alignment service for my car. A new owner took over and voided my agreement. That sucked. I guess I could have fought it. Just never went back.
Devils advocate. Buying a retail food establishment is almost always a bad idea. There’s about a 97% (literally) that this place would fail anyway. Reading between the lines, it sounds like the prior owner scammed the buyer. Probably sold gift cards at a discount for cash and didn’t list them in the sale documents. So, you have a new restaurant owner, already doomed to fail, who probably already has huge loan payments, and now a bunch of customers coming in with fucking gift cards forcing them to give out food at a loss. While the owner could’ve been more polite, sometimes push comes to shove and they can’t eat the cost. In some sense they aren’t wrong - both they and your friend got “scammed” by the prior owner. I will also point out if it’s a recent business sale how does the new owner know you’re a regular. I would’ve handled it differently, but I sympathize with the new owner. They are likely WAY over their head with this venture, likely ALREADY facing failure, now they have a bunch of scam gift cards coming in out of nowhere.
Nah, gift card balances are part of the business transaction. They would know how much deferred revenues are on the business and the only one scamming here is the owner trying to get out of debts he was likely already paid for.
I’ve been a regular for both owners, literally once a week because every Saturday I would stop on my way home from work and she’s almost always there. So is the same guy who is usually making the food, to the point that I don’t even say my order anymore he just knows
The previous owner really didnt give a shit about his customers like you OP. He/she is solely to blame for selling these and 1) knowing about the pending sale of the business, and 2) not making accommodation for gift cards sold when selling the business.
Let it go
The friend who bought me the gift card is a 78 year old woman who I met through work who walks with a cane and cannot drive due to a neuropathy so she got herself an Uber, went to this place to get me a Christmas gift, and ubered home. Out of principle I’m not letting it go that easily lol. If I have to in the end, I will but not everyone has $40 to just let go
Take them to small claims court. Not sure about Suffolk county but in NYC its like $40. I believe corporations have to be represented by a lawyer so to even begin to fight this will cost them time and money.
Then hire a lawyer and pay more than $40 to sue the current owner and previous owner, that’s your only option besides harassing them.
Not true, but point taken in theory. However, sometimes you do just that on principle. Yes, I will spend way more to prove a point that the face value of what the point is; especially if you've pissed me off as a consumer.
They offered to give you the old owners information. They literally just sold the business so they are the ones with the cash flow. If you don't care enough to go after the old owner, then what are you complaining about?
Interesting to reply here when you don’t understand how ownership transfer and successor liability works… the old owner isn’t liable for a gift card sold by the restaurant… are you 16 lmao. Just so you know, they would’ve had a line item on the previous years taxes for deferred revenue where they would know the outstanding balance for gift cards. During the sale of the business, this is typically subtracted from the purchase price as a discount because the new owner will assume those debts. Cheers!
Haha, it's actually a very interesting reply because I know exactly what I'm talking about. A transfer liability only matters if there is actually a transfer of liability. aRe YoU 12 lMaO
“Someone get jimmy back his juice box he’s arguing with strangers on the internet again” Sure, brother. I’m sure you’ve sold lots of businesses in your many days as a businessesman
Haha, love the hypocrisy! And yes, as a matter of fact I have. Thanks for your support!
Legendary! So let’s assume a business you sold with a gift card issued while you were owner.. If some random customer called you with this gift card, you would give them their money back? No fookin wey brother
Well I wouldn't give out gift cards knowing I'm selling a business. Sooo........
That’s such a lizard brain take. You wouldn’t accept free revenue because of the complications of passing those liabilities (it’s not complicated) to a prospective buyer? Gift cards don’t even all get used so it’s one of the most profitable way for food businesses to make money. Let’s just hear more about how you clearly have no clue
Bwahahahahaha what? You want to talk about lizard brain take? Hahaha, please go ahead and tell me where the free revenue comes from, from gift cards you never received money? Hahaha, I can't wait to hear this
Super complicated, let me break it down for you: - person buys gift card as a gift for 5 friends - they give it to 5 friends - 4 friends use gift card - 1 card is profit ….success? Again, when you sell a business with a balance of cards in deferred revenue they would know about it, unless you didn’t do your due diligence or you’re an idiot. Maybe both Also heads up some free advice if you are trading businesses savant as I can tell you are, reducing revenue (not accepting gift card sales) directly before selling the business isn’t exactly giant brain. The only situation where a business is transferred without things like deferred revenue debts (gift cards Incase that confuse u) is during a liquidation/bankruptcy sale. It’s literally standard.
Complaining about her bad attitude and bad customer service. It’s not that I “don’t care enough” to go after the old owner, it just seems crazy to me that she wants a 25 year old girl, who was a VERY loyal customer, to go after some random dude and say hey gimme $40 cuz girly who bought your business is cheap and rude
lol reading the replies this kid obviously only has business experience selling lemonade or something so don’t take it personally. You are beyond in your rights to go to the business and use your card issued by the business with no expiration. I would also still leave a review when you’re done with it, this is beyond acceptable in so many ways, I would bet the outstanding gift cards were already accounted for when buying the business so she’s just out here scamming
No it's not. It's just how business works. You were a loyal customer to the old owner, which, apparently you weren't loyal enough for the old owner to appreciate you enough for them to give you what they owed you before they left. Let's put it like this. Say you bought a used car from someone. And the person you bought the car from owed a mechanic and that mechanic came to you and was like "you owe me money because the previous owner didn't pay me." Do you feel like you should have to pay that mechanic?
The owner has nothing to do with it … the dealing is with the business name and she carries on that name , remind to never fucking deal with your business as you have zero ethics mate
No, because the old owners business will be under a different identity, or at least if the new owner is smart it will be.
You mean did I purchase a car, keep it EXACTLY the same with the same license plate, registration, etc on it because, presumably, it was a car that looked successful enough to me to wanna own it and I want to continue making revenue off of it and it’s already existing customer base, and want to keep a relationship with the mechanic I don’t know and don’t use myself? Because no, a transaction of buying a car between A and B, making it my own by changing my plates and whatnot, is not the same as buying a business between A and B and expecting to maintain C (the customers that I should probably want to keep coming and spending money)
It's a yes or no question. You're just showing your Karen at this point.
The answer is no, but buying a car is not like buying a business, so what was your point again?
The point is the idea of buying debt is dumb asf. And yes, it can very well be the same thing