Reports have retailer Sharper Image, currently undergoing a bankruptcy, is refusing to honor gift cards both in both its retail stores and online.
If you really needed another reason to stay far, far away from these ripoff gift cards, this is it.
So let’s sum up just a few reasons to not use gift cards:
- Limited to spending your money at one store.
- Unused balance often left unspent, meaning pure profit for the retailer
- The cards are pre-paid, non-interest bearing accounts. This means that the store, not you, makes interest on your money.
- Most have monthly maintenance fees after a period of inactivity
- No purchase protection like that offered by credit cards and even debit cards.
- Store may refuse to honor the gift cards at any time, subject to their issuance terms.
- Many Visa branded gift cards do not work at all retailers; in fact, they rarely work at gas pumps.
- As we learn here, gift cards are a form of unsecured debt for the store, meaning that if the store should happen to file for bankruptcy, card holders are very low down on the totem pole when it comes to reimbursement.
With all of these negatives, why do people continue to purchase these things? My guess is that most purchases are made as gifts for others – you don’t know what to buy your friend/aunt/cousing, so instead of picking out a gift, you buy him/her/it a Target-branded gift card. Word to the wise – next time, just give cash.
Customer Experiences from the Consumerst:
… Now, I finally go to the store and hand them my certificate and I’m told that due to Chapter 11, SI is not accepting Merchandise Certificates or Gift Cards from anyone.
He called Sharper Image customer service see what the problem was and the representative told him they had suspended gift card redemptions due to the bankruptcy.
