Other LanguagesI’ve seen quite a few news reports lately warning consumers not to purchase gift cards this season so they don’t get stuck with worthless plastic when a store goes out of business. I’ve also been the recipient of an ominous e-mail that’s been forwarded over and over; the message warns shoppers not to buy gift cards from a long list of stores that are supposedly closing. Perhaps you’ve seen it.
Some stores mentioned in the e-mail, such as Linens 'N Things, are indeed in the process of liquidation. But Talbot’s is also on the list. According to this notice to customers on the company’s site, Talbot's isn’t closing all of its stores and is actually adding new locations in 2009.
Here’s what you should know: Just because a retail chain closes some stores doesn’t mean it’s going out of business or that the store near you will fail.
If a company files for bankruptcy, it’s up to the court to decide which financial obligations are honored. Gift card holders can file a claim, but they go to the back of the line behind other creditors. Even if a company in bankruptcy honors its gift cards voluntarily, there could be limitations on where and how the cards may be used.
The best advice may be to use cards as quickly as possible and avoid buying cards from financially strapped retailers.
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.)