When Elizabeth Grady shut down, customers had no way to spend their gift cards

The Elizabeth Grady Beauty Company was in business for nearly 50 years in Massachusetts. News of its unexpected closing this year has not gone over well with customers, many of whom were left holding expensive gift cards for spa services and want their money back.

Twin sisters Megan Opie and Victoria Lambkin were frequent customers of the Elizabeth Grady salon in Braintree over the years. They took advantage of the company’s annual holiday gift card sale to stock up on spa services throughout the year.

“Usually around Mother's Day and near Christmas time early December they have if you buy an e-gift card, you get 25% off of it. You get $400 worth of service, but you only spend $300. So it ends up being really nice savings over the course of the year,” Opie explained.

They each had over $1,000 in gift cards on their online accounts when they heard the spa had closed in late March. They said they couldn’t get through to anyone at the company.

 “You get that sinking feeling …What are we going to do? …We have all of this money piled up in gift cards,” Opie said.

“I mean, it makes me nauseous to think about because I was so excited to think about getting these gift cards,” Lambkin said.

In January the Elizabeth Grady Beauty School in Medford closed. In a civil lawsuit filed by a lender last October over financing, the company acknowledged it was struggling to operate its business due to regulatory issues with federal regulators. The company claimed the Department of Education stopped reimbursing them for financial aid they disbursed to their students, which strained them financially.

The chain’s dozen or so spa locations have either closed or rebranded under new names. The company website is now gone and the phone number is out of service. Emails we went to company executives bounced back or went unanswered.

“It feels very deceitful, very dishonest. …like they knew something was happening. Like you don't just all of a sudden, one day wake up …and say, we're going to be closing all of our businesses on our beauty school,” Opie said.

The last post on the company Facebook page is dated January 2. Some of the spa locations now operating under new names were franchises and are only accepting gift cards that were purchased at that location.

 “Elizabeth Grady, do the right thing. Like, you have customers who have given you money and they deserve to have it back. If you're not going to honor the services in a different location.”

The sisters say they filed complaints with the Attorney General’s Office in March and finally heard back in June.

The AG’s office told them it has made “multiple attempts to reach the company and its owner and they have not responded, and that “all of the franchisees have either declined to provide relief or not responded to our inquiries.”

The AG’s office told NBC10 Boston that consumers may need to consult a private attorney about their rights in relation to Elizabeth Grady and its franchisees.

If you purchased gift cards by credit card, you can ask if your card offers any purchase protections that could provide a refund.

A good policy for any gift card you receive is to use it quickly. Opie and Lambkin say they may be done with gift cards for good after this.

“I don't know if that would be anything that I ever do again. Certainly not to the magnitude that we did…buying a gift card and then knowing I'm going to use it immediately is one thing. But doing this kind of storing of funds, it was a little careless,” they told NBC10 Boston.

Elizabeth Grady has not yet filed for bankruptcy. If that happens, consumers can file a proof of claim with the US Bankruptcy Court and be added to the list of creditors who are owed money.

But secured debtors, like a bank that provides a loan, take priority and get paid before unsecured debtors, like a consumer who has a gift card to a closed store.