Customers of the former Schimschack’s in Niagara County can get money back for their unused gift certificates under a deal worked out between the state Attorney General’s Office and the restaurant’s owner.
Customers must file a claim with the attorney general’s Buffalo office by April 10 to receive a refund, Attorney General Eric Schneiderman announced Tuesday.
Schimschack’s, located on Upper Mountain Road in the Town of Lewiston, closed suddenly in October after 39 years in operation. The restaurant had 32 employees.
Owner James J. Marinello previously told The Buffalo News he closed the business because he ran out of money, but he did want to refund the gift certificates.
Another reason the business closed was the decline in the value of the Canadian dollar, because Canadians had made up 60 percent of the restaurant’s business.
Marinello, who said he owed $200,000 to $250,000 in business debt, was in mediation with the attorney general regarding complaints filed over the gift certificates.
The office said Schimschack’s had sold gift certificates but had not placed the money into a separate escrow account. Instead, the money was used for day-to-day costs of operating the restaurant.
The restaurant also admits it did not keep a record of everyone it sold gift certificates to, according to the Attorney General’s Office. Instead, anyone who presented a gift certificate received its value.
For that reason, Marinello and the Attorney General’s Office said Tuesday they don’t know how much is owed in refunds.
Marinello said in an interview that he believes between $2,500 and $5,000 is owed to 28 former customers, based on the number who have reached out to him since Schimschack’s closed. Most bought $50 gift certificates, Marinello said.
However, Nicholas Benson, a spokesman for the Attorney General’s Office, said the amount owed could reach as high as $20,000, though he couldn’t elaborate. That would be the equivalent of 400 customers holding $50 gift certificates, but only 40 former customers have contacted the office. Benson noted it would be unusual for the full number of customers to seek refunds for their gift certificates.
Marinello said he doesn’t have the money to refund the unused gift certificates. He plans to pay them back once the restaurant is sold. The site at 2943 Upper Mountain Road isby Pyramid Brokerage for $599,000.
Marinello said he’s optimistic someone will buy it to reopen it as a restaurant, but it’s been tough to market the business in the winter. “I never thought it would take this long,” he said.
Benson said the Attorney General’s Office obtained a confession of judgment that would allow a court to compel payment in the event Marinello fails to pay the promised restitution.
Customers who have an unused gift certificate can file a claim by calling 853-8404. James M. Morrissey in the Buffalo regional office and Karen Davis, the attorney general’s senior consumer fraud representative, handled the case.
Story topics: Steve Watson