The Sharper Image says that with its declaration of bankruptcy, shoppers will no longer be able to redeem the company’s gift cards. That doesn’t mean Sharper Image gift cards no longer have value. They do — just not at the Sharper Image: Across-the-mall competitor Brookstone says it will accept Sharper Image gift cards for a 25 percent discount off any purchase in its own stores.
“The Sharper Image announced late last month that it was suspending the acceptance of gift cards, at least temporarily,” the Associated Press reports. “It urged shoppers to check the company Web site later this month for an update. That is typical of businesses that reorganize under Chapter 11 bankruptcy, which treats gift cards as a loan to the company, not as cash.”
Citing a lawyer, the AP says that bankrupt retailers may be unable to honor gift cards even when they want to, either because they may be unable to afford to or because their creditors and the bankruptcy court may prohibit it.
Brookstone’s decision to effectively turn Sharper Image gift cards into Brookstone discount cards is a way for it to snag new business. “We thought it would be a great way of acquiring new customers,” Brookstone spokesman Robert Padgett tells the AP. “We are here for the long haul, and thought it would be good to let them know.”
The AP explains that the Sharper Image announcement may serve as a warning to consumers whose gift cards bear other company logos, too. “As more retailers file for bankruptcy or go out of business, more than $75 million in gift cards are at risk of becoming worthless pieces of plastic this year,” the AP says. In other words, when you receive a gift card, try and use it promptly.
The danger of the store going out of business may actually be greater than the likelihood of your gift card expiring. A CreditCards.com survey found that most gift cards issued by major retail chains do not expire. For those gift cards that do expire, cardholders may still be able to reclaim the unsused gift card funds.