What to Do With a Gift Card for a Store That Closed
Unsure what to do with a gift card from a closed business? Find clear guidance and actionable strategies to explore its remaining value.
A gift card for a closed store can be frustrating, but it doesn’t always mean it’s worthless. Consumers often have options for redemption or refund. This article guides you through understanding those options.
Assessing the Gift Card’s Validity
Before taking action, gather details about the gift card and the closed store. Examine the card to identify the issuer. Some are “closed-loop” cards from a specific retailer; others are “open-loop” cards from third-party networks like Visa, Mastercard, or American Express. The card’s front and back typically display issuer information.
Next, research the store’s current status. It might be out of operation, acquired by another company, or in bankruptcy. Public announcements on company websites, news articles, or business registries provide insights. Information on mergers and acquisitions can be found on the acquiring company’s website or financial news. Bankruptcy filings are public records searchable through services like Public Access to Court Electronic Records (PACER) or local bankruptcy court websites.
Locate proof of purchase for the gift card, such as a receipt, email, or credit card statement. This documentation serves as evidence of ownership and value. Review any terms and conditions on the gift card or its packaging, including details about expiration dates or dormancy fees. Federal law generally prevents gift cards from expiring for five years and limits inactivity fees.
Pursuing Redemption or Refund Options
After assessing the gift card’s validity and the store’s status, seek redemption or a refund. If the store was acquired, contact the new entity. They might honor existing gift cards, possibly under new terms, to maintain customer goodwill. Contact their customer service with gift card details to clarify their policy.
If the store filed for bankruptcy, consumers can file a claim as an unsecured creditor in bankruptcy court by submitting a “proof of claim” form. Information on filing claims is available on the U.S. Bankruptcy Court website or through PACER. Consumer claims, especially for gift cards, are often low priority compared to other creditors. A refund is not guaranteed and may only occur if sufficient assets remain after higher-priority claims are satisfied.
For gift cards from third-party networks like Visa or Mastercard, contact the issuing bank or financial institution. These “open-loop” cards are backed by the network and may offer redemption or transfer options. If the gift card was purchased with a credit card, consider initiating a chargeback. Many credit card companies offer consumer protections for purchases from businesses that cease operations, allowing for a reversal of the charge. Contact your credit card provider promptly, as chargeback requests often have time limits.
Understanding Consumer Rights
Consumers have protections and resources regarding gift cards. Many states have laws providing safeguards beyond federal regulations. These state laws govern expiration dates, often setting minimum validity periods, and restrict dormancy or inactivity fees. Some state laws also address escheatment, where unclaimed gift card balances transfer to the state treasury after a dormancy period. Find information on state gift card laws through your state’s consumer protection agency or attorney general’s office.
State consumer protection agencies or the Attorney General’s office serve as resources for consumers with gift card issues from closed businesses. They offer guidance, mediate disputes, or investigate complaints. Reporting issues helps them track problems and potentially take broader action, such as negotiating settlements or pursuing legal action. For large store closures, class action lawsuits may emerge, allowing multiple individuals with similar claims to pursue compensation collectively.