What to do if you're stuck with gift card after business closes

As seen in a Call Christina investigation, a Pembroke Pines day spa suddenly closed, leaving clients with gift cards in the lurch.

Local 10 wanted to know if you could get your money back if the gift card was purchased with a credit card, so consumer advocate Christina Vazquez posed the question to the online credit card marketplace CreditCards.com.

Senior industry analyst Matt Schulz told Local 10: 

"Many credit card issuers have so-called 'guaranteed return' policies, which allow for cardholders to return purchases even if a store won't. Here are some examples:

Citi: https://www.cardbenefits.citi.com/Products/60-Day-Return-Guarantee.aspx
Discover: https://www.discover.com/credit-cards/member-benefits/return-guarantee.html?icmpgn=publichelpcenter
MasterCard: http://www.mastercard.us/card-benefits/index.html
American Express: https://www.americanexpress.com/us/content/card-benefits/return-protection.html

This is not a complete list. If their bank is not listed here, your viewers would be wise to call the 800 number on the back of their card and ask a customer service representative whether they would allow a return of the gift card.

And all of these different cards have different rules and stipulations as to what is and is not covered. For example, some say you have to contact them within 60 days of purchase, others 90 days. Some refund up at $250 per return, others more or less.

It's also possible that some issuers might exclude gift cards from these return policies. For example, American Express excludes gift cards and gift certificates. (See the policy for their Delta SkyMiles American Express card here: https://web.aexp-static.com/us/content/pdf/card-benefits/DeltaSkymilesCard/Return-Protection.pdf) Call your issuer and ask.

Whatever the case, however, it can't hurt to ask for a refund -- especially given the unusual circumstances surrounding this case. After all, as they say, if you never ask the question, the answer is always no."

Local 10 News also contacted the Better Business Bureau.

In a BBB consumer education blog entitled, "What Happens When a Store Goes Out of Business?" the BBB writes:

"The holiday shopping season is upon us and it could make or break many major retailers.  With more retailers closing stores, or going out of business completely, consumers are confused about what will happen to their outstanding product orders, unused gift cards and extended warranties.

When a retailer files for bankruptcy, there are two primary options -- Chapter 11 or Chapter 7.  Chapter 11 means the company intends to reorganize and continue to do business as usual. However, Chapter 7 means the company will close and liquidate any assets in order to pay creditors. If a business intends to continue operations under Chapter 11, it will often still redeem gift cards, fulfill services and deliver on goods. Some Chapter 11 bankruptcies, however, quickly turn into Chapter 7 and then the chances for the consumer to receive any compensation are greatly diminished.

Product Orders

Bankruptcy law is specific regarding who will benefit first in the case of a retailer's liquidation. Unfortunately, customers are at the end of the line. Typically, the money gained from selling the company's assets goes to paying back secured creditors, as well as any employee wages.  Whatever is left over is divvied among customers who have outstanding claims for goods and services.

Customers who paid with credit cards may be able to dispute the charge with the credit card company and get their money back.  For this reason, the BBB highly recommends that consumers pay with credit cards, instead of cash, checks or debit cards.  Customers who paid by cash, check or debit card will need to file a claim with the bankruptcy court administering the process. The deadline is typically 90 days after the bankruptcy filing date.


The validity of any outstanding warranties varies for each bankruptcy. If a retailer goes out of business, the consumer may be able to rely on the manufacturer's warranty. If a manufacturer goes out of business, the consumer may be able to rely on any warranties provided by the retailer. Many extended warranties and service plans are provided and administered by third parties and are typically not affected by a retailer or manufacturer going bust.

Gift Cards

In cases of Chapter 11 bankruptcy, courts will decide if the business must honor gift cards or certificates. If the business has filed Chapter 7 bankruptcy, the gift card holder must file a claim. In some cases, consumers might actually get at least part of the value of the gift card back.  The BBB advises consumers to redeem gift cards as soon as they are received to avoid possible problems down the road with the retailer's solvency."