Judge OKs settlement over dispute involving RadioShack gift cards

Wilmington, Del. • Electronics retailer RadioShack on Thursday won court approval of a settlement involving priority treatment of certain gift-card holders in the company's bankruptcy and has agreed to sweeten the deal for other cardholders.

Under the settlement approved Thursday by a Delaware bankruptcy judge, holders of roughly a third of the $46 million in outstanding gift cards will receive priority status and have claims paid in full.

But in a significant development reached shortly before the hearing, General Wireless, an affiliate of hedge fund Standard General that acquired the RadioShack trademark and more than 1,740 of the electronics retailer's stores after its bankruptcy filing, has agreed to honor all RadioShack gift cards for 50 percent of merchandise purchases.

That means gift card holders deemed as not having priority status under Thursday's settlement have an alternative to being left with only pennies on the dollar, if anything, as general unsecured creditors.

"They get the benefit they bargained for," said Cathy Hershcopf, an attorney representing RadioShack's official committee of unsecured creditors. "We think the settlement is a very, very generous settlement."

The update to the original settlement is still subject to court approval at a hearing next week on whether to confirm RadioShack's overall bankruptcy plan, but Judge Brendan Shannon described it as a "significant development and a positive one."

Meanwhile, Shannon refused to grant class-action status to a proposed class of individual gift-card holders who challenged the underlying settlement, which was negotiated with the attorneys general of several states, led by Texas.

"Having approved the settlement, I'm not satisfied that class certification is necessary," Shannon said, adding that the creditors committee and attorneys general can adequately represent the interests of gift-card holders.

Under the settlement approved Thursday, gift-card holders are divided into five categories based on the circumstances in which they obtained their cards. People who purchased cards for themselves or someone else have priority status for payment of claims, along with people who "reloaded" existing cards with more money. A small subset of people who hold cards that were issued between 2000 and 2004 and have since been "deactivated" also would be allowed priority claims. Holders of other cards, including promotional giveaways, and cards given in exchange for merchandise returns or in response to customer service complaints, are lumped in with general unsecured creditors.

However, under the proposed add-on to the settlement, all gift cards also would be honored at RadioShack stores, good for half of the purchase price of merchandise being bought. Thus, a holder of a $20 card could use it to cover $5 of a $10 purchase, but could redeem the full amount of the card for a purchase of $40 or more.

Attorneys said that's a significant improvement for nonpriority card holders, who as general unsecured creditors would at best recover only pennies on the dollar for their gift-card balances and would be subject to a $10 minimum recovery threshold. That means they likely would receive nothing at all unless the gift-card balance was between $500 and $1,000, said Clint Krislov, an attorney representing the purported class of individual gift-card holders.

"There's not a large amount of merchandise returns at that number," the judge noted.

While Krislov said the proposed change to the settlement was an improvement, he also argued that it means little if RadioShack does not take adequate steps to ensure that as many gift-card holders as possible receive proper notice of their rights.

RadioShack attorney Greg Gordon said the company has agreed to send email notices to all gift-card holders whose addresses are on file. Card holders also will be able to go to a website to learn about their rights, with the creditors committee and attorneys general overseeing the notice process to ensure that consumers are adequately informed.


Source: The Salt Lake Tribune and Randall Chase from The Associated Press

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TAGS:   card services, legislation, trends


Don’t Toss That Loyalty Card: Most Australians Still Prefer It

For marketers worried that consumers are growing weary of loyalty-rewards programs, the results of a new study bring a sigh of relief – at least in Australia.

Despite the perception of consumer fatigue and worries about low program activity rates, the study found that 59% of loyalty-program members in Australia are active in all of their programs, up 31% from 2013. The study “for love or money 2015” – by strategic loyalty consultancy Directivity and retention marketing agency Citrus – defines “active” to mean the member has used his membership or card in the last 12 months.

As for that card: Program operators shouldn’t be so quick to toss it. The study found that 67% of members still prefer using a traditional loyalty card, while only 10% prefer a mobile app.

“We found this one of the most surprising findings of all,” said Peter Noble, report co-author and CEO of Citrus. “It goes to show that getting the card into a person’s wallet or purse is a critical piece of brand real estate and connection.”

Loyalty programs are doing a better job of capturing a bigger share of those wallets and purses, too, said Directivity CEO Adam Posner, and the programs are evolving from cost centers into key profit drivers. A full 82% of those surveyed say they’re buying more from brands with a loyalty program, and 16% even report purchasing items they don’t need just to earn rewards; that number jumps to 26% for men under 45.

More members are sticking with their loyalty programs, too, with the defection rate falling to 22% from 26% in 2013. Noble credits that staying power in large part to the fact that brands are working to keep their programs simple; only 12% of survey respondents said programs are too confusing, for example, compared with 19% in 2013.

When it comes to rewards, money still talks: The preferred program benefit is still immediate price discounts, followed by redeemable points-based programs. And members want to be rewarded for their interaction with brands, with 53% expecting something for answering surveys and 46% for opening emails.

“This research is a good news story for loyalty marketers,” said Posner. “While consumers are telling us they’re more selective with their programs, they’re also more active and engaged.”

The 2015 study – the third annual “for love or money” research effort – was based on surveys of 1,367 Australian adults who are members of at least one loyalty program. In addition to up-to-date consumer insights, it benchmarks results over the last three years. The full report is available at


Source: Colloquy and The Loyalty Point

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TAGS:   card manufacturing, card services, Loyalty, Rewards and Membership, trends


InComm Expanding Offerings into Asda Living Stores

-- Gift card malls to be placed into 26 stores by the end of August --

ATLANTA, Aug. 19, 2015 /PRNewswire/ -- InComm, a leading prepaid product and transaction services company, is proud to announce it will be expanding its offerings this summer in Asda, the United Kingdom-based subsidiary of the world's largest retailer, Walmart.

By the end of August 2015, InComm will expand  its gift card malls into 26 Asda Living stores, which offer consumers all of Asda's non-food products, including George clothing, home ware, electrical, health and beauty, music and video, and toys. Many Asda Living stores also include café shops, which enhances the consumer's shopping experience, encouraging them to take more time in the store.

"The growth of the gift-card category in Asda stores has been very impressive over the past few years," said Tim Pope, Vice President, InComm Europe. "By expanding and further solidifying our partnership with Asda and Walmart, we are going to be able to continue offering consumers the prepaid products they want in the stores they prefer."

InComm has developed a strong relationship with Asda over several years, having worked with the UK retailer to develop the gift-card category in more than 200 of their stores. By now offering InComm's gift card malls, Asda Living stores will have a prepaid destination for consumers looking for third-party gift cards from the most popular brands across a wide range of categories and services. InComm's gift card malls offer consumers the convenience and value they want for retail, music, digital content, gaming and entertainment.

"At Asda, we are always striving to provide our customers with the products they want in the most seamless and convenient way, " said Michelle Creaney, Head of Cards and New Initiatives, Asda. "We have been able to do that with InComm. Expanding their gift card malls into our Living stores is an extension of our desire to make shopping rewarding and easy in our stores."

About InComm
Leveraging deep integrations into retailers' point-of-sale systems, InComm provides connectivity to a variety of service providers that allow consumers to conduct everyday business at more than 450,000 points of retail distribution worldwide. Whether those consumers are activating prepaid products, paying bills, enjoying real-time discounts through a membership card, purchasing digital goods in-store or adding funds to an online account, InComm is there to provide unique gift-gifting opportunities, cater to on-the-go shoppers, deliver added value through loyalty programs and serve cash-based consumers. With 186 global patents, InComm is headquartered in Atlanta with a presence in over 30 countries in North and South America, Europe and the Asia-Pacific region. Learn more at or connect with us on,, or

About Asda Stores Ltd.
Founded in the 1960s in Yorkshire, Asda is one of Britain's leading retailers. It has more than 180,000 dedicated Asda colleagues serving customers from 592 stores, including 32 Supercentres, 329 Superstores, 34 Asda Living stores, 194 Supermarkets, 26 depots and seven recycling centres across the UK.  Its main office is in Leeds, Yorkshire and its George clothing division is in Lutterworth, Leicestershire. More than 18 million people shop at Asda stores every week and 98 per cent of UK homes are served by  Asda joined Walmart, the world's number one retailer, in 1999.


Source: InComm & PR Newswire

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TAGS:   card services, InComm