Over the past decade, gift cards have become a popular holiday present. Giving gift cards is easy – they are small, so there is not much wrapping required, and because they permit the recipient to purchase whatever he or she likes from the retailer, they eliminate the pressure to choose a gift the recipient will like.
Gift cards do have a few disadvantages, though. One of these is that their retailers can file for bankruptcy and go out of business, leaving the recipient with a useless gift card. As more and more retailers file for bankruptcy, such as Toys R Us and Charming Charlie, it is important the gift card purchasers and recipients know what to do with gift cards for these retailers.
You can Probably Still Use the Gift Card
In many cases, retailers request court permission to continue honoring gift cards in their bankruptcy petitions, and this request is often accepted. Sometimes, you can even use a gift card after a struggling retailer closes its doors for good if the retailer was part of a larger family of stores or had a sister company. An example of this is how Chipotle honored Shophouse Kitchen gift cards after the latter eatery closed.
Read the Fine Print to be Sure
When a retailer liquidates its assets during bankruptcy, gift card holders are in the same position as unsecured creditors. To determine exactly whether your gift card is usable and any limits on it, read its fine print, and if there is a customer service helpline, call it to get answers to your questions.
Your gift card might start accruing fees after sitting unused for a certain period or even expire if it is not used within a specified period, which is often the case with “bonus cards,” gift cards meant to be used as coupons, rather than cash. Of course, these can happen with any gift card, regardless of whether its retailer is facing bankruptcy or not.
Consider Trading the Gift Card
There are websites and apps where you can liquidate or trade gift cards. If you are unsure about the future of your gift card’s retailer or whether you will use it, consider using one of these apps or websites to get a gift card you will actually use. In many cases, reorganization bankruptcy means changing all aspects of a company’s operation, which can mean closing certain locations and streamlining its product offerings. You might not want anything from the retailer or be able to get to its closest location after a restructuring.
Work with an Experienced Fox River Grove Bankruptcy Lawyer
Bankruptcy means changes for every party involved with the bankrupt company. As a consumer, you can be affected too. Learn more about bankruptcy and its different chapters by speaking with an experienced bankruptcy attorney. Contact Newland & Newland, LLP today to set up your initial consultation in our office. We serve clients in the Arlington Heights, Palatine, Rolling Meadows, Libertyville, Mundelein, Buffalo Grove, Schaumburg, Elk Grove, and Itasca areas.
(image courtesy of Annie Spratt)