Gift cards are convenient and extremely popular. But consumers who don’t plan to use gift cards quickly may be throwing away their money.
Washington’s gift card law is quite consumer-friendly. Gift cards and gift certificates sold by retailers never expire or carry expensive maintenance fees. (The law doesn't apply to VISA and Mastercard gift cards, however.)
Should a store go bankrupt, however, that card can still become worthless. Consider this article from TheStreet.com:
Last Christmas, a Sharper Image gift card could buy a home breathalyzer machine, a digital photo-displaying key chain or a trip to a zero-gravity chamber in Nevada. Two months later, the same gift card couldn't be used for anything -- except maybe a bookmark.That is because Sharper Image filed for bankruptcy Feb. 19 and immediately stopped accepting its own gift cards. The gizmo retailer's woes are evidence of a growing hazard for consumers: gift cards that become worthless when a company goes broke.
Bankruptcies at big national chains like furniture sellers Levitz Furniture and Bombay & Company left those holding gift certificates in the lurch last fall.Analysts say the faltering economy will spell even more losses this year: Those with plastic promises in their wallets will lose at least $75 million in 2008, according to an estimate by the research firm TowerGroup.
Linens ’n Things is the latest chain to file for Chapter 11 bankruptcy protection. Fortunately, the chain has obtained court approval to fully honor its gift cards, rewards certificates, coupons, merchant rebates and existing return and exchange policies, according to a company news release.
About $8 billion worth of gift cards given by Americans in 2006 still hadn’t been used by the end of 2007, according to one study.