Gift Cards: The Hidden Danger of Buying, Giving, and Getting Gift Cards

Giving gift cards can seem like an easy, yet thoughtful gift to give. After all, you're letting the recipient select something they actually want at their favorite store (I mean does Dad really want or need another tie or pair of socks?). So imagine the horror when your loved one goes to redeem the gift card and the store has gone out of business. What happens to the value on the gift card? Unfortunately, the answer is usually the gift card is worthless. Recently the restaurant chain Bennigan's and Steak and Ale went out of business without any notice leaving many people with unused or partially used gift cards and no place to use them. However, an establishment does not have to go completely out of business for your gift card to be worthless.

Gift cards for companies that file have filed for bankruptcy protection may or may not be worthless. Under bankruptcy laws, stores don't have to accept their own gift cards. Sometimes, usually if a store is not planning on closing completely and wants to maintain customer goodwill, they will accept the cards without restrictions. Other times, they will accept them with limitations. For example Sharper Image, who recently filed for bankruptcy protection and plans to close all its stores, agreed only to accept their gift card when the purchase amount was at least double the amount of the gift card.

According to news reports, the retail chains listed below have either filed for bankruptcy protection, or are planning to close some or all of their location. While this does not mean they will not accept gift cards, you may want to use caution when buying gift cards; or better yet, avoid buying and giving gift cards from any retailer or restaurant all together. And if you do get a gift card as a present, use it right away. It's the only way to ensure that you're not stuck holding a worthless piece of plastic.

Recently Filed For Bankruptcy Protection

Circuit City (closing some stores)

Closing all Stores

Bombay

Cache

J. Jill

Levitz

Linens and Things

Movie Galley

Pacific Sunwear

Piercing Pagoda

Sharper Image

Whitehall

Wickes

Wilson Leather

Closing Some Stores

Ann Taylor

Catherine's

Dillard's

Disney Stores

Eddie Bauer

Ethan Allen

Fashion Bug

Footlocker

GAP

Home Depot

JC Penney

K B Toys

Lane Bryant

Lowes

Macys

Pep Boys

Sprint/Nextel

Talbots

Zales