Beach Resort will NOT honor $600 gift certificate due to ownership change

[budgirl]

What is the name of our state (only U.S. law)? CA
My husband and I received a $600 gift certificate to a beautiful beach resort in California.. JS.
We received this in March and I called to reserve on May 30th. I just happened to call yesterday to confirm our room, and was notified by the front desk manager.. that an ownership change had taken place within the last 30 days, and our certificate would not be honored.
She basically gave me the name of the previous owner, and said you can contact him to try to recover your money... yea right....
We are furious about this.. can someone please advise me on this? I filed a complaint with the Better Business Bureau as well.
Thank you.

 

[Zigner]

What is the name of our state (only U.S. law)? CA
My husband and I received a $600 gift certificate to a beautiful beach resort in California.. JS.
We received this in March and I called to reserve on May 30th. I just happened to call yesterday to confirm our room, and was notified by the front desk manager.. that an ownership change had taken place within the last 30 days, and our certificate would not be honored.
She basically gave me the name of the previous owner, and said you can contact him to try to recover your money... yea right....
We are furious about this.. can someone please advise me on this? I filed a complaint with the Better Business Bureau as well.
Thank you.

Advise you about what? You'll want to contact the prior owner...

 

[CSO286]

What is the name of our state (only U.S. law)? CA
My husband and I received a $600 gift certificate to a beautiful beach resort in California.. JS.
We received this in March and I called to reserve on May 30th. I just happened to call yesterday to confirm our room, and was notified by the front desk manager.. that an ownership change had taken place within the last 30 days, and our certificate would not be honored.
She basically gave me the name of the previous owner, and said you can contact him to try to recover your money... yea right....
We are furious about this.. can someone please advise me on this? I filed a complaint with the Better Business Bureau as well.
Thank you.

The new owner is under no obligation to honor the gift certificate.

 

[budgirl]

The new owner is under no obligation to honor the gift certificate.

that is pretty messed up... given the fact that this all transpired within 90 days...

 

[LdiJ]

The new owner is under no obligation to honor the gift certificate.

Maybe...it depends on the terms of the sale...and state law. It is absolutely NOT automatic that the new owner of a business is not obligated to honor gift certificates issued by the previous owner.

If the business was purchased in its entirety then the new owner is absolutely obligated to honor gift certificates issued by the previous owner...because the new owner would be responsible for both the assets and the liabilities of the previous owner. If the purchase was an asset only purchase then the new owner would not automatically be obligated but provisions of the purchase could make them obligated.

In other words, you cannot make the statement that the new owner is under no obligation to honor the gift certificates of the previous owner. They absolutely might be obligated or not...or even if not, they might stupidly be courting bad PR by not honoring those gift certificates.

 

[Proserpina]

I'm actually in agreement with LdiJ, more or less.

But I have a question. OP, how did the gift certificate come about? Was it purely a gift from someone? Or something more along the lines of ... you sit through a sales presentation and then you get the freebie?

I think the answers might change dramatically if it's the latter.

 

[latigo]

Maybe...it depends on the terms of the sale...and state law. It is absolutely NOT automatic that the new owner of a business is not obligated to honor gift certificates issued by the previous owner.

If the business was purchased in its entirety then the new owner is absolutely obligated to honor gift certificates issued by the previous owner...because the new owner would be responsible for both the assets and the liabilities of the previous owner. If the purchase was an asset only purchase then the new owner would not automatically be obligated but provisions of the purchase could make them obligated.

In other words, you cannot make the statement that the new owner is under no obligation to honor the gift certificates of the previous owner. They absolutely might be obligated or not...or even if not, they might stupidly be courting bad PR by not honoring those gift certificates.

Now there is strange bit of tergiversation.

If the new owners purchased the whole ball of wax, then they are "absolutely" bound to honor the certificate. But if only assets were purchased (not sure how one would go about pricing liabilities) the new owner would not be "automatically" obligated. Perhaps responsible, but not unavoidably so.

Seems that not only were horses changed in the middle of the stream of double talk, but the author chose to mount a second animal headed in another direction.

 

[Proserpina]

Now there is strange bit of tergiversation.

If the new owners purchased the whole ball of wax, then they are "absolutely" bound to honor the certificate. But if only assets were purchased (not sure how one would go about pricing liabilities) the new owner would not be "automatically" obligated. Perhaps responsible, but not unavoidably so.

Seems that not only were horses changed in the middle of the stream of double talk, but the author chose to mount a second animal headed in another direction.

You seem to have quite the fascination with horses. Perhaps you should keep an eye on that.

 

[LdiJ]

Now there is strange bit of tergiversation.

If the new owners purchased the whole ball of wax, then they are "absolutely" bound to honor the certificate. But if only assets were purchased (not sure how one would go about pricing liabilities) the new owner would not be "automatically" obligated. Perhaps responsible, but not unavoidably so.

Seems that not only were horses changed in the middle of the stream of double talk, but the author chose to mount a second animal headed in another direction.

You clearly know nothing on this subject so perhaps this is one time that you should not go there.

 

[quincy]

As LdiJ noted, whether the new owner of the resort must honor gift certificates that were purchased from the old owner of the resort can depend on the conditions of the sale of the property.

If the sale included the assets as well as the liabilities, the liabilities of the old owner would include unredeemed gift certificates, and the new owner would (generally) be obligated to honor them.

I think it could be important for you to contact the new owner again and also contact the previous owner. Even if you might not get the vacation you wanted, you should be able to get a refund for the value of the certificate and a refund of any additional money you might have spent on reserving space at the resort.

If you encounter difficulties with either or both, you could contact your Attorney General's Office. You could also consider a lawsuit but, with luck, this can get resolved outside a courtroom. The BBB complaint may or may not get you anywhere - filing a complaint is not something I would have considered.

I jotted down a link to the California Business and Professional Code (Sections 17530-17539.6), with the following sections listed: 17533.8a (with a cryptic note next to it saying "Pro"), and 17537.1b and 17537.2 (these two with no notes of any kind next to them), and then I have the letter "d" floating near these sections numbers (but I have no idea why).

At any rate, here is the link and maybe someone can make some sense of why I wrote it down, as I head off for a burger or two from McDonalds and more coffee to see me through the night : http://www.leginfo.ca.gov/cgi-bin/displaycode?section=bpc&group=17001-18000&file=17530-17539.6

One additional note: I noticed on the resort website that there is a gift certificate promotion being advertised. I wonder if the website has been updated since the sale of the property and/or if the website was one of the assets included in the sale.

 

[davew128]

The new owner is under no obligation to honor the gift certificate.

Not necessarily true. If they bought the assets of the hotel, then possibly no. If they bought ownership of the entity which owned the hotel, yes they most certainly do.

 

[quincy]

Not necessarily true. If they bought the assets of the hotel, then possibly no. If they bought ownership of the entity which owned the hotel, yes they most certainly do.

There is a lot to be considered, including the type of gift certificate that is involved. A gift certificate that has conditions or restrictions on its use can alter the obligations of the new owner, this even if the new owner purchased all assets and liabilities of the property.

I looked over the laws that I cited and, if the gift certificate was one dependent on sitting through a sales presentation (which is what Proserpina was inquiring about), the offer of a free resort stay or a discounted resort stay could not be made legally without full disclosure to the consumer as to the terms and conditions of use. Gift certificates even without a sales presentation can have restrictions to the use (e.g., no holiday use).

That said, if budgirl's certificate was a LEGITIMATE one (not a counterfeit) and budgirl had no problem making a reservation to stay at the resort and/or if budgirl put down a deposit to reserve space at the resort for a specific date, if the reservation is not honored (for whatever reason) a refund seems in order. It then becomes a question of who needs to do the refunding, the new owner or the old owner. The facts may need to be reviewed by an attorney in budgirl's area, if a satisfactory resolution to the problem cannot be found otherwise.

 

[Zigner]

Advise you about what? You'll want to contact the prior owner...

I'm going to elaborate on this a bit.

If you contact the prior owner, then you will likely find out more information about the terms of the transfer of ownership. The prior owner will probably be happy to explain that the new owners bought the whole kitten-kaboodle, which will then give you an idea of the path you'll need to take. Not as likely (but still possible) is that the prior owner says "No, they only bought the assets" which will also give you an idea of the path you will need to take.

I, too, am curious about this certificate and how it was obtained...

 

[quincy]

I'm going to elaborate on this a bit.

If you contact the prior owner, then you will likely find out more information about the terms of the transfer of ownership. The prior owner will probably be happy to explain that the new owners bought the whole kitten-kaboodle, which will then give you an idea of the path you'll need to take. Not as likely (but still possible) is that the prior owner says "No, they only bought the assets" which will also give you an idea of the path you will need to take.

I, too, am curious about this certificate and how it was obtained...

If all else fails and neither owner is willing to honor the gift certificate, budgirl could potentially file a civil action against BOTH owners and a court could sort it all out. This, of course, is apt to be the most expensive option out of those available. Should a suit be necessary, however, it is potentially possible for budgirl to wind up with an award that includes not only the amount of the certificate and reservation fee (if any) but also treble the damages.

Contacting the previous owner, and contacting the new owner once again, to discuss the matter DOES seem to be the smartest place to start, though.


("kitten" caboodle?)

 

[Zigner]

If all else fails and neither owner is willing to honor the gift certificate, budgirl could potentially file a civil action against BOTH owners and a court could sort it all out. This, of course, is apt to be the most expensive option out of those available. Should a suit be necessary, however, it is potentially possible for budgirl to wind up with an award that includes not only the amount of the certificate and reservation fee (if any) but also treble the damages.

Contacting the previous owner, and contacting the new owner once again, to discuss the matter DOES seem to be the smartest place to start, though.


("kitten" caboodle?)

Kit and caboodle - I know