CSA's News You Can Use: Gift Cards: Use ‘Em or Lose ‘Em?

(Metropolitan Washington Council, AFL-CIO)
"If you have any 'gift cards'" from stores declaring bankruptcy, "make sure you use them, or you will lose them!" warns an email making the rounds. But before you rush out to shop, be aware that rumor-checker Snopes.com says this is a "a mixture of accurate, inaccurate and outdated information." According to Snopes, "A company's 'filing for bankruptcy' doesn't always mean it is going out of business. Companies typically file for Chapter 11 bankruptcy protection in order to put forth reorganization plans that will allow them to keep their businesses alive while they pay their creditors over time." Also, "Although federal law allows companies to stop honoring gift cards when they file for Chapter 11 bankruptcy protection, not all businesses do so. Some companies may continue to redeem store gift cards while they reorganize, while others may temporarily suspend redemption of gift cards for some period of time and resume it later." And finally, "not all the companies listed in the warning(s) have filed for Chapter 11 protection yet (and may or may not eventually do so)." Click here for the latest status on many of the stores in question.