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Gift Card Alert: Circuit City filing for bankruptcy?

images.jpgIs Circuit City going out of business? Over the last week or so, there have been lots of questions regarding gift card redemption from Circuit City. The questions are based on rumors of the company being on the verge of bankruptcy.

Even though the company was on a recent list of retailers at risk of going under during the recession, i do not believe the company is going to file for bankruptcy soon unless the current offer from Blockbuster to buy Circuit City falls through. If the deal falls through, Circuit City will be under a lot of pressure to do something dramatic to turn itself around. In the absence of a plan, and if the company continues to burn cash, they will have no choice but to file for bankruptcy protection.

As I have recommended before, if you currently hold a Circuit City gift card, now is the time to use it or risk losing it should the company go under. I would also not recommend buying a Circuit City gift card until the dust clears.

Readers, what are your thoughts about Circuit City and rumors about the company? Post your comments in the comments section below.

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35 Comments

  1. I don’t think was a issue a few years ago. It’s just that BK are really popular now. An interesting number would be to see how much money do these retailers hold are in gift cards? I’m also interested to see the numbers this year, how many $ were lost in BK related gift cards. With high gas prices and increased costs in consumer good, I don’t know what the future will hold.

  2. There not going bankrupt. In order to go bankrupt you have to be in debt and no money. They have very tiny tiny debt with tons of cash in their bank account. Look it up, they have $50 million in long term debt with $400-500 million in cash and $1.1 in liquid assets. Plus there opening 70+ stores this year. What kind of bankrupt company does that?

  3. GiftCardBlogger™

    anonymouse, i think the jury is still out on Circuit City. It appears Best Buy is executing better then Circuit, and the current recession is going to make their problems worse unless they come up with a better model. Laying off their highest paid workers and replacing them with inexperienced workers has not helped with customer service at their stores either. I agree with you that they have the capacity to hang around for a while but for how long if they don’t change direction?

  4. theIchItool

    Customer service is not a problem for Circuit City, they have always ranked higher than Best Buy and many other retailers in secret shopper surveys (try to get help returning a product at walmart with their mandatory 1 customer service associate). Their business model is no more flawed than any other electronic store. It is a tough business when new technology is considered old two weeks later. The media has blown everything out of proportion as they always do.

  5. GiftCardBlogger™

    theIchItool, you make some good points. The electronics business is a tough market to be in. Now, i am wondering if combining Circuit City with Blockbuster will help the situation. It appears Blockbuster is trying to present the merger as a way to position the two companies for the future (where the digital world of entertainment is heading) but I am not sure if that is the solution. Any thoughts?

  6. Ash

    Circuit City is not filing for bankruptcy. I do some work with them and I know this is not the case. It is just a rumor.

  7. Sean

    I dont think they are going out of business right now but heck for blockbuster to only offer $1 billion to buy them, that should show something.

  8. I just got off the phone with with their over seas phone agent and they advised that this is all an rumor floating around.

    Though if they did layoff all those employee’s that is something that would sway my support!!!

  9. GiftCardBlogger™

    Ash, Sean and AnonOmoose, thanks for stopping by.

  10. Luis Yo

    I actually work in the new store The City(3369) at San Patricio Plaza in Guaynabo city, Puerto Rico. I think the company is in Bankruptcy. In the last 3 weeks various experience and customer service partners have 7 to 10 hours schedule. Nobody lives with that shedule. Several supervisors and other personal was dismissed. In the store, merchandise are not received almost, and other bad operations things.

  11. GiftCardBlogger™

    Luis, thanks for stopping by. Your insider account is definitely appreciated.

  12. circuit city employee

    i work at circuit city and i do think they are going bankrupt.Stock in the store has dramatically decreased. sales have also decreased. stollen produtc is another big thing just in one store alone we are missing over 80,000 dollars starting from february. and thats just one store alone.so do the math. BANKRUPT!!!!!

  13. Insanity

    Lol you people don’t know what attempting to force stock pricing down is do you? Circuit City is one of the least in Debt Electronic companies in the world.
    First off, Filing for Bankruptcy is public knowledge, if this information were true there would be front page headlines in most states in the US. Hope some lawyer out there doesn’t get an itch and want to sue whoever decided to deface and post fraudulent information.
    Everyone has opinions but if it costs shareholders some green then I expect the next Season of “24” to be hell bent on cyber economic terrorism.

    Nice read though.
    lol

  14. GiftCardBlogger™

    Circuit city employee & Insanity, thank you both for your comments.

  15. anonymous

    I currently work at circuit city as a technician and they just cut our hours nationwide. Im not sure if we are going bankrupt or if our economy is going down cause I hardly see any tech jobs availiable in my area. Everything is just going and I blame increasing gas prices when we could solve the economy issue by actually touching our own oil reserves gas prices should surely jumped way down. but no we wont touch our oil reserves until we go into another depression. But yeah im pretty sure every buisness is going through the same phase not just electronic stores.

  16. Insanity

    Pretty much all forms of a physical standalone video rental company will fall to the wayside to online rental Co’s. Blockbuster merging with CC gives blockbuster a chance to continue.
    What most people don’t realize is that most of the cd’s that you see in stores now will more than likely not exist in that media format by the end of this year, or early next year. Digital downloads as a sole source of audio/video are on the horizen, don’t say i didn’t warn ya.

    /good day sirs 🙂

  17. GiftCardBlogger™

    Insanity, i agree. I think blockbuster sees the writing on the wall and is preparing for a time when DVD will not be the dominant format.

  18. Anonymous

    To the person who said that they won’t go bankrupt because they have money- that’s 110% incorrect. A company can still have money and not very much debt and still go bankrupt… You can go bankrupt and still have money. Look @ Wickes Furniture Stores!! You have to still have money at the end to keep the doors open to get rid of your assets and also give employees severence.

    To the person who claimed that a customer representative told them that they’re not going bankrupt so it must be true is too naive. Not only would they be fired if they gave out confidential information, they wouldn’t even be given that confidential information in the first place in that type of position.

  19. patty

    i hold a 900 dollar card and just found out about this should i use this card know and for warrentys from circuit city what happens to those if u bought a warrenty on somehing

  20. GiftCardBlogger™

    Patty, i suggest you use the gift card soon since nothing is certain these days when it comes to retailers. From what I know, your warranty should not be affected in a chapter 11 bankruptcy, unless there is a total liquidation (i am not sure what happens to warranties purchased when a company completely closes shop).

  21. I have one of those warrenties that I just purchased 2 months ago. I would really like to know what would happen if they do go completely under?

  22. john

    I too have a warranty with Circuit City and I’m in the middle of waiting on an exchange for my $2,200 52″ TV. I have been getting the run around for nearly two months and they told me today it would be another 14 buisness days to set up the details of the exchange. Very, very upsetting.

  23. Kevin

    Your warranties wont be voided they are through GE not Circuit City

  24. Mikie

    The gift card alert should be re-emphasized as we approach the Christmas Season and Circuit City flirts with store closures and rumors of trying to avoid Chapter 11 bankruptcy.

  25. GiftCardBlogger™

    Thank you Mikie. I am going to post a piece soon updating readers about current happenings at Circuit City.

  26. Angela

    Ok, obviously they DID file bankruptcy. Now, I do know the protection plan system will either replace the item, or send you a gift card for the amount of the item. So if the replacement warranty sends you a gift card, how the heck are you supposed to use it if they’ve filed bankruptcy? Send the card back to the protection plan and say either mail me a check or mail me my item? How is this going to work?

  27. Grant

    Well, it looks like the anonymous guy #2 was wrong. Circuit City has indeed filed for Chapter 11 and according to the filing, Circuit City had $3.4 billion of assets and $2.32 billion of debt as of August 31, and more than 100,000 creditors. So, I don’t know where he got the-

    “There not going bankrupt. In order to go bankrupt you have to be in debt and no money. They have very tiny tiny debt with tons of cash in their bank account. Look it up, they have $50 million in long term debt with $400-500 million in cash and $1.1 in liquid assets. Plus there opening 70+ stores this year. What kind of bankrupt company does that?”

    -what a moron.

  28. A word to the wise: I got stuck with worthless Toys.com (remember them?) gift cards when they went under. I used them as gifts and it was really embarassing.

    Use those Circuit City gift cards now before it’s too late.

    Daniel Durazo

  29. Insider

    Its official, they are indeed going bankrupt. I have checked from inside sources, so do not buy anything expensive and no gift cards.

  30. B Musich

    I was wondering ……I have lots of 5 year warrinties on alot of electronics ….Am I screwed if they go out of business?????
    Do u have any suggestions,info, or advice.
    Thank so much
    Have a good day

  31. GiftCardBlogger™

    B Musich, unfortunately, I have no idea about how warranties are treated under bankruptcy. Hopefully, someone reading this and has some insight will respond. Thanks!

  32. Well if CC , Does go bankrupt..what happens to their inventory…will of the CC’s close or jus a few that really dont produce that much in the area as I live in Huntington,Wv their is a CC like 2 minutes of walking time between best buy and its self.. soo That might be a problem around here..and if they do go Bankrupt..does all the inventory get shipped to the consumers..or we talkn SALES?!?!?! I will continue to buy from CC cause if they go on sale hell ya im hittn it HARD with my Credit Card!

  33. circuit City Buyer GTAVCS

    I went there the other day to buy a ps2 game Grand theft Auto Vice City Stories but I doubt 20 bux is gonna help them any, also I saw this DVD gift card and I was thinking of getting it so see whats on it, is there a minimum amount you can put on those like maybe a dollar, I just want the DVD

  34. Sam

    I contacted Circuit City because I have them linked on my gift card site http://www.giftzip.com . They said they are committed to honoring gift cards in bankruptcy. That is their promise, but who knows what it will look like if their treasury goes down to nothing and they have to prioritize their creditors.

  35. Can anyone tell me of a website that has really nice FREE christmas Ecards, because i keep finding sites that say ‘ 1 month free trial, but they ask for your credit card, and i dont want to do that.I have found some free sites, but they don’t have very nice cards.Please let me know of any good sites you know of, th

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