Gift Cards Not Looking So Sharp

Bankrupt retailer isn't honoring $25M in gift cards

By Jim O'Neill, Newser Staff

Posted Mar 4, 2008 11:00 AM CST

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Gift Cards Not Looking So Sharp — An exterior view of the Sharper Image at Stanford Shopping Center is shown in Palo Alto, Calif. in this June 6, 2006 file photo. A weak holiday season and a struggling economy led retailers Sharper Image Corp. and Lillian Vernon Corp. to file for bankruptcy this week, and analysts predict others could... (Associated Press)

Consumers holding Sharper Image gift cards are out a collective $25 million after the gadget retailer stopped honoring the cards when it filed for bankruptcy in February, MarketWatch reports. With the shaky economy likely to produce more bankruptcies over the next year or two, consumers would be wise to redeem other cards they may be hoarding.

Consumers spent $26.3 billion on gift cards last holiday season, reports the AP. They could lose as much as $75 million from retailers and restaurants closing in 2008, analysts say. Although some states regulate gift cards—primarily regarding fees and expirations—the rules regarding what happens in a bankruptcy are murky at best. (More bankruptcy stories.)

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