SASEBO NAVAL BASE, Japan — The Army and Air Force Exchange Service said this week it would continue to redeem gift certificates issued by Ohio-based company CertifiChecks, which has said it will file for bankruptcy.
The Defense Commissary Agency said it is considering emergency measures to accept the certificates.
Donors bought the gift certificates for wounded, needy and hospitalized servicemembers via military charities, including the Navy-Marine Corps Relief Society and the Fisher House, according to information posted on the Navy Exchange Web site.
Military shoppers around the world also bought and received the certificates, which had been redeemable at the Navy, Marine Corps and Coast Guard exchanges, Defense Commissary Agency supermarkets, and Army and Air Force Exchange Service stores.
CertifiChecks abruptly closed on Feb. 26, and in a statement posted online said it plans to file for bankruptcy in Dayton, Ohio. Its corporate telephone line leads to a recorded message with a mailing address for customers seeking a "potential" reimbursement.
On Wednesday, the Navy Exchange site was still linking to an order form for the CertifiChecks certificates sponsored by the Relief Society and Fisher House. An exchange spokesperson was not immediately available for comment.
The Navy Exchange "Gifts from the Homefront" certificates, which were sponsored by the aid groups, ranged in price from $5 to $50. A link to an order form for individual family member gift certificates was removed.
Meanwhile, the bankruptcy could have far-reaching effects across the United States as well as in the military community.
Chambers of Commerce in Ohio, Pennsylvania, Michigan, Connecticut, Iowa and elsewhere were taken aback this week as word of the bankruptcy circulated.
About 350 chambers nationwide were using CertifiChecks gift certificates to boost local spending, according to the Detroit News in Michigan, where 23 chambers were left with at least $1 million in irredeemable gift cards.
Thousands of businesses could be affected and millions of dollars lost in the United States following the collapse of the company, according to news reports.
DeCA first announced the bankruptcy Saturday and said Tuesday that it does not know how many of the gift certificates are still in circulation — or how much money might be lost by consumers.
DECA shoppers bought $3.9 million of the gift certificates in fiscal 2008, the agency said.
The certificates were bought directly from CertifiChecks, which held the money until DeCA submitted the cashed certificates for reimbursement, according to DeCA spokeswoman Nancy O’Nell.
"The Commissary is not a ‘for profit’ enterprise and has no legal authority to exchange appropriated-fund-supported merchandise for something we know to be worthless," Ronald Kelly, acting chief of DeCA corporate communications, said in an e-mail response to Stars and Stripes. "We are, however, investigating whether emergency authorities can be used to allow commissaries to continue accepting Certifichecks at a loss."
AAFES said it hired CertifiChecks as a third-party provider for its Gifts from the Homefront program six years ago because the company’s certificates could be redeemed at other exchanges regardless of service branch and offered more flexibility than a traditional gift card.
The agency now offers its own gift card, which can be used at other exchanges, but will continue to accept the CertifiChecks gift certificates, according to Lt. Col. Dean Thurmond, AAFES chief of corporate communication.
