If you’re holding onto gift cards right now, you’re sitting on money that you could lose if the company that’s connected to those cards permanently closes.
For example, when stores like The Bombay Company, Linens and Things, and Sharper Image declared bankruptcy awhile ago, the gift cards that people had for those stores were invalidated at the same time. Any gift card holders for those retailers at the time were simply out of luck.
Don’t let this happen to you!
The following tips will ensure that you get your money’s worth from any old gift cards you have lying around.
We’ll help you answer the following questions:
- What should you do if the gift card issuing company goes out of business?
- What should you do if you suspect that a company might go bankrupt?
- How do you exchange and swap gift cards?
- What are some things to consider before you buy gift cards?
TIP: If any of your old gift cards have already been made worthless by bankruptcy proceedings, don’t toss out those cards just yet! As companies emerge from bankruptcy proceedings, you may find that those gift cards are once again good.
What To Do With Gift Cards From Bankrupt Companies
So, what can you do make sure you don’t lose the value on your gift card if a retailer suddenly goes into bankruptcy?
If the company has gone out of business, do this:
- Contact the vendor. If you purchased a gift card from a vendor (rather than from the store itself), contact that vendor directly. You may be able to redeem the card’s value for a new gift card at a different store.
- Contact your credit card company. If you paid for a gift card with a credit card, consumer protection laws may qualify you for a full refund.
- Use the gift card at that store’s competitor. In some cases, stores accept their competitors’ gift cards or give you discounts in exchange for them. This is a great strategy they use to earn your loyalty as a customer.
- Hold on to the old gift cards. Although they may be useless now, some companies emerge from bankruptcy and resume business again later. When this happens, they may accept old gift cards that were issued prior to their bankruptcy.
What If You Think The Company May Go Out Of Business?
I’ve been guilty of holding onto gift cards longer than I should. When a store is rumored to be in financial trouble or it officially goes into bankruptcy, you need to act quickly before the value of your gift card runs out.
Here are 3 things you can do if you think the company my go under soon:
- Use your gift cards immediately – Think of gift cards as money. You wouldn’t forget about cash sitting in your wallet. So don’t forget about your gift cards either.
- Trade or sell the gift card immediately – If you get a gift card you cannot use, then trade it immediately or sell it via a site like SaveYa.
- Don’t buy gift cards to begin with. The truth is many gift cards go unused anyway — so you may want to just refrain from buying gift cards altogether. In fact, Marketwatch says that consumers waste over $1 billion each year on unused gift cards.
See how to check a gift card balance right now.
Best Tips For Buying Gift Cards
When you buy gift cards, you take real money that can be spent anywhere and turn it into money that’s only good at one retailer or restaurant.
If that company goes bust, then you’ve basically lost that money.
Best practices when buying gift cards:
- Buy only from sources that you know and trust. Watch out for online auction sites (Ebay, Craigslist, etc) — because the gift cards may be counterfeit or may have been obtained fraudulently.
- Read the fine print before you buy. Is there a fee to buy a particular gift card? If you buy a card by phone or online, are there shipping and handling fees?
- See if the recipient will have to pay fees. Sometimes fees will be deducted from the card after you purchase it and reduce its value.
- Inspect the card before you buy it. Verify that none of the protective stickers have been removed from the gift card. Also, make sure that the codes on the back of the card haven’t been scratched off to reveal the PIN number.
- Give the recipient your original receipt. That way, they can verify the card’s purchase in case it is lost or stolen.
- Buy gift cards from successful national stores. Consider the financial condition of the retailer or restaurant at the moment — before you buy.
Just for fun, check out these gift card statistics.
I have been a certified tightwad since I became pregnant with my first child and decided to find a way to stay home with him. I enjoy sharing my experiences in my journey back to financial health and planning for a future — which will include sending 2 kids to college and early retirement.