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Gift Cards, The Gift That Can Stop Giving

Gift cards have been a great tool to give people for rewards and presents. And not that we are creeping towards that holy and special gift giving time of year and gift cards will line the racks and fall first into our consideration of things to give, WATCH OUT!

With the danger of so many retailers not making it through the holidays or early next year, the valuable gift card you give today will be next to worthless if the retailer goes bankrupt before the gift card is used. And with the bleak outlook for retailers this holiday season, it is very possible that some big name stores and restaurants will go bankrupt.

A gift card becomes an unsecured debtor in a retailer bankruptcy so the chances of anyone getting anything are slim to none.

Take the recently reported case of John Houston, when he returned a gift to Sharper Image earlier this year, the store gave him a merchandise certificate for $216. Not long afterward, Sharper Image filed for bankruptcy and now won’t accept Houston’s merchandise certificate, or any of its gift cards.

If you want to make sure you don’t get nailed by the bankruptcy grinch then you can still give a gift card like one issued by Visa through or from American Express.

Buyer beware for gift cards this year.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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