Gift cards totaling about $66 billion will be tucked into birthday, wedding and holiday cards this year. According to Brian Riley, TowerGroup's research director for bank cards, roughly one-third will be spent within 90 days and another third within six months. Some $20 billion worth will linger in drawers for months.
Delayed gratification in this case could be a mistake. Retailers are struggling in the current economy, and if a gift-card issuer files for bankruptcy, there's a good chance your card will become worthless.
Although bankrupt companies have assets, which are distributed to the firm's creditors, your status as an unsecured creditor puts you in line behind banks and other secured creditors. They will receive 100% of their investment before you get a dime. If you get anything at all, it's likely to be small, perhaps 5 cents on the dollar.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Sometimes a firm will ask a bankruptcy judge to let it honor gift cards. But don't count on that happening.
Several retailers have filed for bankruptcy recently or appear dangerously close. Gift cards from The Sharper Image are worthless; ditto for those of The Bombay Company.
Lillian Vernon, the once-popular catalog and online retailer, was sold to Current USA, which markets address labels, scrapbooking supplies and other stationery products. Current is accepting Lillian Vernon certificates at face value.
Linens 'n Things is also honoring cards for the full amount. So are Movie Gallery and Hollywood Video, just emerged from bankruptcy.
Bankruptcy rumors are swirling around Circuit City. Customers should redeem its cards pronto.
-
Ask the Editor — Tax Questions on "The One Big Beautiful Bill Act"Ask the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on the new tax law.
-
The Anti-Prime Day Deals Guide to Everyday Essentials Worth Stocking up on at Walmart, Target and Sam's ClubSkip Amazon and shop these anti-Prime Day deals at Walmart, Target or Sam's Club to save on all of your household essentials.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
Roth IRA Contribution Limits for 2025Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
-
Four Tips for Renting Out Your Home on Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute VacationTravel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
How Much Life Insurance Do You Need?insurance When assessing how much life insurance you need, take a systematic approach instead of relying on rules of thumb.
-
Five Reasons You Shouldn't Shop on Amazon Prime DaySmart Buying Is Amazon Prime Day still a good deal? We'll break it down.
-
When Is Amazon Prime Day? Everything We Know, Plus the Best Deals on Apple, Samsung and MoreAmazon Prime Amazon Prime Day is four days this year. Here are the key details you need to know, plus some of our favorite deals to shop during the sale.
-
How to Shop for Life Insurance in 3 Easy Stepsinsurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
