Timing is Everything
When is $200 worthless? This is not about the current state of the debt ceiling talks. This is about a restaurant gift certificate I was given recently. Very recently.
I was sad to learn the news earlier this week about the closing of Cypress on the Hill. I’d been a few times and had enjoyed the topnotch and frequently inventive food in its modern casual setting. I’m sad of course also for people who’d put their money and their dreams into the restaurant and for those who worked there.
All of this sadness occurred this past Tuesday July 26th. In an email that day Executive Chef Alex Gallis and General Managers Jon McCallus and Greg Pfaender announced: “We had hoped to attempt to remain open through July 30, however, the issues surrounding the pending end of business became too intrusive to allow us to prepare adequately for dinner service.”
My $200 gift certificate was issued June 24th. If you’re not reading closely you may have missed that those two events happened approximately one month apart.
I understand businesses fail and restaurants more often than many other types. I can imagine the heartbreak and wreckage that must come with it. I know there are people hoping to get paid for their last week of work or their last delivery of vegetables and that my $200 is probably lowest among the priorities in terms of both amount and claim. In fact, staff and creditors will come first, according to one of the managers.
My complaint is with the ethics (legality?) of selling a $200 gift certificate that says it’s good for one year when most likely the restaurant management knew the end was near. The closing email says they had hoped to be able to remain open. When did it become a hope and not a plan? Before they issued the gift certificate? If they didn’t want to let word get out, they could have changed the expiration date or suggested renovations were due so the recipient might want to come sooner rather than later. Further, my certificate is initialed by what appears to be “JM”, which happens to be the initials of one of the management team listed above and, if so, not an unsuspecting, unaware staffer. Even if someone out of the loop had signed it, management could have told staff to no longer issue certificates for some reason.
My three calls to Cypress this week were not helpful. A man who told me not to use his name told me writing that gift certificate was a “safe bet in our opinion” and they were surprised by the slow traffic of July and Chapel Hill in the summer. I mentioned that it wasn’t the restaurant’s first summer, nor, obviously, its first July.
I’m not in the restaurant business so I really didn’t know if was possible to not know you’re at risk of closing one month before it happens so I turned to an expert. Sandra Murzin is an adjunct professor at NYU where she teaches a course on Food Production & Management. She has her students cost out elements of food service to understand how to manage the uneven flow of the business. Murzin is also a CPA who holds an MBA and works as a consultant in New York’s restaurant and specialty food industry. I told her my chagrin at the proximity of the gift certificate to the closing and asked her if I was being unreasonable to think it should not have been issued as management likely was aware there was a chance it would soon be worthless.
She said that there are certainly “signs that a restaurant is in trouble” and, without knowing any of the specifics of Cypress on the Hill, she explained management was likely juggling who would get paid when and for what prior to one month before having to close.
The farewell email does seem to indicate a longer ramp to the end: “…we have been unable to generate the level of growth in this economy necessary to sustain operations.”
In my limited grasp of economics, it seems to me that selling gift cards and certificates are short-term loans for the places that sell them: They get $$ and don’t need to repay it (in goods/services) until it’s redeemed. In my now sullied and not savvy view, this was likely a loan that the “borrower” knew would likely not be repaid.
So, in order to regain my Savvy Spender title, do I need to forswear gift cards and certificates? No, I don’t think so. In fact, I’m quite confident about one I just bought as a birthday present for a particularly delightful young lady. I will, however, think hard from now on before buying one.
As for the coupon offers proliferating among us these days? I checked and the daily Our Local Deal (offered partly by the publishers of this site) does offer protection in that you will be able to get your money back if the business is no longer around to fulfill the deal. Let’s hope it’s not an issue and that our local businesses stay healthy!
Do you think I’m right to be vexed? I haven’t lost all sense of proportion; I know it’s worse to shutter a business. But fellow Chapelboroeans (?), this Savvy Spender thinks writing that gift certificate at the end of June was some substandard selling. Agree? Disagree? Have your own story to tell? Comment below or write to me at Donnabeth@Chapelboro.com