INDIANAPOLIS — When a business closes suddenly, it can leave customers in the lurch—especially if they have outstanding gift cards or gift certificates left to spend.
It happened to an Indianapolis woman after a downtown spa shut down with no warning.
"Studio 2000 Salon and Day Spa" has been on Monument Circle for 30 years and closed its doors on August 7, citing downtown violence and the impact of COVID-19.
Customers say they didn't learn about the closing until after the fact, and some have gift cards left to spend.
Lena Wesco has a $200 gift certificate to Studio 2000 Salon and Day Spa that she can’t use.
"My husband got it before COVID, in February, for Valentine’s Day,” said Wesco. “I figured I had time because they have been open forever."
Studio 2000 sent an email to customers, including Wesco, on August 10, three days after the closing, but the email did not give any alternatives for consumers who still have gift cards or credits at the spa.
“Our beautiful Monument Circle has become a haven for a group of drug users and mentally ill people who are aggressively pursuing our staff and customers, defecating on the sidewalks and the alleyways, openly dealing and using drugs while driving customers out of downtown,” read the email. “As small business owners, we have found that these current social and economic conditions downtown have cut our sales by more than 50%, while our expenses remain at 100%. We cannot operate at a loss and keep our head above water during this downturn in retail business.”
The email came as a surprise to Wesco and other customers.
"Why would you send it to me on Monday the 10th and you're already closed?” said Wesco. “Maybe they could partner with someone else who can help take their customers. I would have been happy with that, but they didn't give me any options.”
Wesco reached out to WRTV Investigates after she said no one responded to her emails.
We contacted the company via email and Facebook and they referred us to Indianapolis attorney Harley Means, who specializes in bankruptcy.
WRTV is still waiting to hear back from Means.
"I know a gift certificate in the grand scheme of everything going on in the world is not a big deal but it's personal to me,” said Wesco. “I feel bad for them too. They've been there forever. I guess that's why I thought I had time."
WRTV Investigates spoke with Scott Barnhart, the director of consumer protection at the Indiana Attorney General’s office.
"Certainly it frustrates the consumers,” said Barnhart. “They purchase it thinking they're getting a good for a service and they're not."
Barnhart said it’s a good idea, given the COVID-19 climate, to spend gift cards in your possession as soon as possible.
"I think it's important to take stock of what you have,” said Barnhart. “If you know they’re going to close, obviously go out and use them. But very often, businesses for various reasons don’t necessarily announce they’re going to go out of business.”
If a business closes suddenly, see if a competitor will honor the gift card.
If the company is filing for bankruptcy, file a proof of claim with the bankruptcy court and try to recover your money that way.
Also, keep your gift cards just in case the business reemerges after the pandemic.
Barnhart said you may want to avoid spending a lot on gift certificates right now, especially at one business.
"Avoiding those opportunities where you have cards, steering away for right now,” said Barnhart. “This is an issue that's not going to go away as we go into leaner times and stress in the economy, there will be more businesses that fold and you're not necessarily going to know. "
Barnhart is encouraging consumers to file a complaint with their office at www.indianaconsumer.com.
“Consumers often think why bother, why should I bother doing this,” said Barnhart. “They should bother, because at the AG we monitor trends and patterns. And at a time like this, it’s important for us to know and if we don’t receive those complaints, we don’t know.”
FULL EMAIL SENT TO CUSTOMERS ON AUGUST 10
"Dear Friends of Studio 2000,
It is with great sadness we share with you that Studio 2000 Salon & Day Spa has suspended operations as of August 7, 2020. After 30 years on Monument Circle, the closure of our family business during the 77 day State mandatory COVID 19 shut down completely ended our company's income, while still having all of the ongoing expenses such as rent, insurance, suppliers and utilities.
After receiving a SBA PPP loan to help restart our employees on June 1, the Monument Circle area was devastated just 36 hour prior by violence. Rioters smashed store windows, looted goods and burned many of our fellow neighboring businesses, all live on television. This damaged the psyche of the residents, workers and shoppers in downtown. Countless clients have told us they are afraid to come downtown.
The many office towers and parking garages in downtown remain mostly empty, since many companies are still working from home. The 4 major hotels downtown who just reopened are barely occupied because the convention and event business has taken a major loss from complete event cancellations or rescheduling.
Our beautiful Monument Circle has become a haven for a group of drug users and mentally ill people who are aggressively pursuing our staff and customers, defecating on the sidewalks and the alley ways, openly dealing and using drugs while driving customers out of downtown. As small business owners, we have found that these current social and economic conditions downtown have cut our sales by more than 50%, while our expenses remain at 100%. We cannot operate at a loss and keep our head above water during this downturn in retail business.
We and our neighborhood retailers met with the President of the City Council, a second member of the Council and our area's State Representative. We all expressed our concern on all of the above issues that are ruining our chances to stay in business and asked for a plan to help downtown recover from this trauma. Nothing materialized. The Mayor's office, Indianapolis Downtown, Visit Indy and Keep Indianapolis Beautiful have taken too long to act. They have no plan to help retailers, except they are launching a $1 million advertising campaign to encourage people to visit downtown Indianapolis. Yet, the aforementioned problems will still greet them.
Over the next few days, we will be helping our loyal, talented and wonderful 20+ staff members find new homes to conduct business with you and stay employed. They are our first priority. We have retained the professional firm of Kroger, Gardis & Regas to help us with this business transition and work with our creditors and suppliers. The firstname.lastname@example.org email is still active and we will send out where our staff has landed to help you find them. Our last day of operation was last Friday.
Many of you have been lifelong customers since our opening as a two person salon in 1989. We appreciate your support and business over these many years. We will look back on all of the happy and positive memories with you like weddings, fashion shows, charity fundraiser, awards of excellence and keeping our staff employed over the last 30 years. We have seen our team and clients get married, have children and grow up, and we've served as many as four generations. We have felt the love of our staff and of this extended family, especially with this sad announcement.
But like the loss of a family member, we will remember the great friends and memories we made along the way at Studio 2000. Thank you all for understanding our plight during this difficult and heart wrenching time. We would have never dreamed that our "Beautiful Business" and our vibrant Monument Circle would end up like this. A mandatory government shutdown, a worldwide virus, a violent riot and an infested empty downtown have ended our dream.
We had our season in the sun, but it is time to say thank you everyone and good bye.
Sincerely,Studio 2000, Inc.Melvin Brandenburg, Linda & Kevin Williams"