Buyer Beware: Gift cards come with some risk

SANTA BARBARA, Calif. - Support local. Shop local. 

It is a pandemic mantra folks in Santa Barbara have practiced for the past year. But, as one man learned, that slogan should come with a warning: 'Let the Buyer Beware.'

"The Enterprise Fish Company is one of our favorite restaurants for many years," said William Santoro, a resident of Montecito.

That consumer warning comes as a painful reminder for Santoro, like a slap in the face with a cold fish. It can happen with any type of retailer, large or small, local or national.

Santa Barbara's long-running and popular seafood restaurant had a sale, a 15-percent discount on its gift cards. It was February of last year, right before the pandemic hit.

"So I bought a $500 one for $425 to use when we have a big family event or a guest from out of town," said Santoro.

Within three months, the 41-year-old State Street eatery closed its doors, for good. 

"They left no word, nothing. And you cannot get them on the internet."

Same goes for its sister-restaurant in Santa Monica.

"I never used it at all, a dime from it," said Santoro.

"There's effectively no way to get the money back," said Christopher Dalbey, Deputy District Attorney with the Santa Barbara County District Attorney's Office. 

NewsChannel 3 made several attempts to contact someone associated with the Fish Enterprise Co. Restaurant but, no luck. So, we reached out to the District Attorney's Consumer Protection Unit and connected with Dalbey. He shared tips about buying gift cards in California and said there is no expiration date, and usually, no service fees.

"If you buy a gift card and then the company goes out of business, your gift card loses its value," Dalbey explained. 

Dalbey said the D.A.'s Office has not received complaints about gift card issues with local businesses during the COVID-19 pandemic. However, he did say that in Santoro's case, and others like him, recouping your hard-earned cash is unlikely.

"If the company goes into bankruptcy and there's a proceeding in bankruptcy court, one could go to the bankruptcy court and get in line with all the other creditors. It's kind of a long slog and might not be worth it but it is a viable path to try and get some money back."

Santoro said he was even hit up for months by former Fish Enterprise Co. employees via GoFundMe, fishing for donations. That account has since gone inactive.

"I have sympathy for the businesses, of course, but more so for the customers," said Santoro.

"There's no law that just says, 'If the company goes out of business you can go straight to the owner.' That doesn't exist under the law," said Dalbey.

Dalbey shared one last tip. He said if you're holding a gift card with a balance of less than $10 dollars, by law, you can go into that business and get the remaining amount in cash.  

That is, if the business is still open and operating. 

Click the highlighted linked for more information about the Santa Barbara County District Attorney's Office.