That gift card you're holding might not be worth the plastic it's printed on. As it turns out, one of the casualties of retailers filing for bankruptcy protection are gift card balances that get zeroed out in the process.
Jon Tapper, a public relations executive who received gift cards for Sharper Image, found out recently that they were worthless.
"I love gift cards, but now this makes me think twice," he told The Associated Press.
Carol Ann Razza, who lost several hundred dollars when the Georgette Klinger salon closed last year, put it another way. "You really feel like you were robbed," she said.
Mr. Tapper and Ms. Razza are not alone as the growing number of retailers filing for bankruptcy or liquidating outright means that many gift cards have become nothing more than plastic waste.
Brian Riley, senior analyst at The Tower Group, told the AP that consumers could lose more than $75 million from stores and restaurant closings this year.
Some believe that the number of retailers reorganizing or going out of business will reach a level this year that has not been seen since the recession of 1991.
"You will see a lot of frustration among customers. You basically stole (money) out of the customers' pocket. They will never forgive you," said C. Britt Beemer, chairman of America's Research Group.
Not honoring gift cards can come back to bite retailers who find customers have moved on to other stores.
Brookstone has sought to take advantage of the ill will created by Sharper Image's refusal to accept its gift cards by offering 25 percent off any purchase to consumers who hand over the now worthless plastic at the time of purchase.
Sharper Image has said that it intends to reinstate the cards at some point in the future although it did not provide a date when questioned by the AP.
Not all companies that go into Chapter 11 immediately void their cards. In the recent case where NRDC Equity Partners bought Fortunoff, the new owner decided to honor the gift cards.
Discussion Questions: Is there any way for a retailer to rebound from the bad taste it creates by refusing to honor gift cards? Do you see consumers losing confidence in buying gift cards this year due to news of retailer bankruptcies and closings?