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How can bankrupcy suddenly stop them from honoring gift cards?!?! THEY'RE ALREADY PAID FOR!

This concept is ridiculous.

"This concept is ridiculous."

Not really.

By purchasing a gift card, you have effectively loaned money to the company that you purchased the card from (at zero interest, I might add - Which is why they're so popular for these companies to sell).

As a creditor to the bankrupt company, you have to stand in line among all the other creditors - including merchandise suppliers, landlords and company employees who often can't get their final paychecks, access 401K benefits or gather back vacation pay and medical savings plan benefits - even tho they already earned or paid for these benefits...

The best gift card to purchase is a Visa, Mastercard or American Express which is usable in any store - Or simply write your recipient a good old-fashioned gift check like Grandma used to do.

Also, if you decide to give (or received) a Visa gift card, use it right away. I received a Visa gift card and put it aside to use on a rainy day. When I tried to use the non-expired card, it didn't work and then when I finally got around to calling the company (only open 9-5, M-F) they informed me that not only had they frozen it due to inactivity, they were also charging a monthly fee. My $100 gift certificate was now only worth $55. I spent HOURS fighting the charges over the next week and they finally credited me for those fees but I will certainly think twice before ever giving those out.

revolution9

Technically the holder of a gift card is just another creditor of the company in the event of bankrupcy therefore they may not be honored by the company.

That's an eye-opener. I thought a VISA gift card was the way to go. It's good 'ole checks from me from now on.

Of course, I really think everyone should try to think of something a person would like to have and go buy it. But teens like $$$$.

This is why I don't give magazine subscriptions as gifts any more also, because every time I have in the last few years (Budget Living, Blueprint) the mag closed up shop and the recipient never got an issue (or very few).

Ack! Linens N Things and Circuit City have both already filed for bankruptcy protection. Linen N Things is in the process of liquidating and Circuit City is restructuring.

Sigh. This (along with revolution9's comment) is probably why we shouldn't talk finance on a home blog.

I don't plan on giving gift cards at all until the economy is a little more stable.

BTW, California residents: if you have a gift card with less than $10 in credit on it, you are allowed to return the card for cash. It's California state law, as of earlier this year. Just FYI.

Green backs. They never go bad and everyone takes them.

Not sure why youd give a check outside of convenience. Especially to a teen or a kid. Never understood that.

Circuit City it not accepting their giftcards.

I was in ours today, one of them scheduled to close down. It was a sad looking best buy in the first place and now it is worse.

Right on the door signs say we are not accepting circuit city gift cards or any credit or debit cards from chase.

My guess is because a liquidator has bought the inventory of the store and it selling it off. This happens a lot. Same signs every time and same dude's holding signs on the corner. None the less, circuit city doesn't own the merchandise anymore, so why would this company honor it. I know you're getting screwed, but they don't want to either.

Lets say for an outrageous example, you have a $5000 gift card to circuit city. The liquidator doesn't know that when they buy the stock. Who knows how many gift cards are out there. So they don't want to lose $5000. so they'd don't let you use them

If you have a CC gift card. find a store that will accept it (one of the non closing as of yet stores) and use it up.

Oh and i got screwed by those visa giftcards too. they suck.

Thanks for the tip, Stilletto! Good to know.

Since people are already on the internet you would think that googling something would be easier than just spouting off an ill-informed opinion.

Here's an interesting tidbit:

In documents filed with the U.S. Bankruptcy Court for the Eastern District of Virginia, the Circuit City requested permission to continue honoring its gift cards, warranties, rewards points, and claims for refunds, exchanges, and other customer satisfaction programs

They probably aren't honoring gift cards yet because the order hasn't come through from the court (it was filed Nov 10th). Also, they are restructuring, not liquidating. Big difference. There's no guarantee that the restructuring will work but it's no liquidation yet.

Wow... definitely eye-opening.

Emily

Linens N' Things still honors them. We used one up not long ago when I found out they were closing.
- MM

caw261-

not all of CC stores are at the same status right now. 150 or so of them are being shut down while the others stay open to "restructure". Ours is being shut down, and they are liquidating. Or maybe the people that work there are all wrong and CC just happens to shop for signs at the same place that all the other places that have went out of business and liquidated do.

Before stores started having trouble, gift cards were still a bad idea because it's not easy to redeem the whole amount. Inevitably the card user would have to pay extra or leave a portion of the card un-redeemed. Cash is always best.

In order to use a Macy's gift card online, you have to call the service center so they can "confirm" the amount on your card. I was on hold for so long (and annoyed that a such a big store didn't have a better solution for this issue), that I canceled my order and used the card at a store instead.

I like receiving iTunes gift cards, but that's about it.

So, in fact, gift cards will be honored by the stores in bankruptcy as soon as the court approves it? Could the original post be updated to reflect this information, as it's misleading as it stands now.

Visa and Amex gift cards are good for a year before they start dinging you with fees. Frankly, I've never had one last that long :)

I work for a company that manages and tracks gift cards. It's unfortunate that retailers for filing for bankruptcy, and destroying the trust factor in gift cards. At LeverageCard.com, when gift cards are purchased from us, we guarantee your gift cards when retailers file for bankruptcy: http://tinyurl.com/5nfk5f