Gift cards: What to do when retailer files for bankruptcy

Earlier this month, creditcards.com posted an article on retailers filing for bankruptcy. Many consumers are left scratching their heads not knowing how what to do with gift cards.

As retailers ranging from Toys R Us to The Limited and Gander Mountain file for bankruptcy, shoppers are scrambling to figure out to what to do with their gift cards from those and other stores.

There’s no simple solution, but if a retailer is on shaky financial ground, use your gift card while you can. As holders of gift cards from The Limited discovered this year, gift cards were useless pieces of plastic once the stores closed. In the cases of Wet Seal, RadioShack and hhgregg, gift cards were honored only briefly after their bankruptcy filings.

Here are the seven tips they provided when dealing with gift cards and bankruptcy:

  1. Pay attention to the news: Gift cards can lose all value when a retailer declares bankruptcy.
  2. Use the card right away: If you have a gift card from a shaky retailer, don’t wait.
  3. Save your card purchase and activation receipts: A successor company may want you back as a customer, and honor the card.
  4. Report to state consumer agency: You could add pressure in the bankruptcy case to think of gift card holders.
  5. Follow the court case: Bankruptcy judges have sometimes offered gift card hodlers limited-time redemption options.
  6. Initiate a chargeback: If you used a credit card to buy the gift card, it could come to your rescue.

Note: Gift cards: What to do when retailer files for bankruptcy” originally was posted on CreditCards.com. Click link to read original story.