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Chapter 11 Bankruptcy Gift Card Watchlist for 2017

When a company files for Chapter 11 bankruptcy protection, outstanding gift cards become vulnerable. List of gift cards to keep an eye on in 2017.


Take Me Straight to the List

Gift Cards in Critical Condition

Gift Cards Making a Full Recovery

RIP: The Gift Card Graveyard

READ the Chapter 11 Video Transcript

The Bankruptcy Gift Card Conundrum


  • Family Christian closing all stores. Use gift cards immediately.
  • Bob’s Stores files for bankruptcy.
  • Wet Seal files for bankruptcy again. All stores closed.
  • The Limited stores are closed and the website is down. YOU MUST FILE A CLAIM.
  • American Apparel says gift cards may not be honored after December 31, 2016.
  • Golfsmith files Chapter 11 on 9/14. Gift Cards no longer accepted in closing locations.
  • Aeropostale files for Chapter 11 bankruptcy protection. Gift Card situation hopeful.

When a store or restaurant files Chapter 11, the company goes into a reorganization process with a plan to make the business profitable and to figure out how to pay creditors over a period of time. Although the hope is that the business will be saved, other scenarios can occur such as shutting the doors completely, selling the company as a whole or selling parts of the company to a new owner.

The problem for gift card holders is that when a company is in this type of financial trouble, outstanding gift cards become just as vulnerable as the business itself. In fact, the cards are often deemed immediately useless even though stores are open and merchandise remains on the shelves. While some companies ask the courts for permission to continue accepting gift cards during bankruptcy proceedings, some don’t and others only ask for permission to accept the cards for a limited period of time.

Consumers who miss the opportunity to use their gift cards before decisions are made often find their cards are worthless or they must file claims in order to join the list of creditors wanting their money back.

(Read what happened to Borders gift card holders here.)

Gift Cards in Critical Condition


While I always advise using gift cards immediately because the longer you hold onto gift cards, the higher the likelihood that you’ll lose the cards or forget to use them, when you have a gift card to a store in financial trouble, the urgency is even greater. Below is a list of stores currently in or rumored to soon be filing Chapter 11. While I am not a lawyer and cannot offer legal advice on whether or not to buy these gift cards, I do suggest using them before what happened to Borders gift card holders happens to you.

MerchantFinancial StatusNew Gift CardsOutstanding Gift CardsFile a Claim
Family Christian Stores
Family Christian Stores all closing
Family Christian Stores stops selling gift cards.Family Christian Stores will honor gift cards until stores are closed. Stores will be closed by end of March 2017.Not applicable.
Bob’s Stores
Bob’s Stores files for bankruptcy.
Bob’s Stores continues to sell gift cards.Bob’s Stores continues to accept gift cards.To be determined.
Wet Seal
Wet Seals files for bankruptcy AGAIN.

Wet Seal files Chapter 11 for gift card subsidiary too.
Wet Seal stops selling gift cards.Wet Seal accepting gift cards for a short period.Check the balance of your Wet Seal gift card and use it immediately. All sales are final.

With Wet Seal filing chapter 11 for it’s gift card holdings, it’s unlikely consumers will be able to file a claim to get their money back.

Website refers creditors to the company’s claims and noticing agent: Donlin Recano.
The Limited
The Limited stores nationwide are officially closed. website is shut down and the company files for bankruptcy.
The Limited stops selling gift cards on 11/28/16.The Limited stops accepting gift cards on 1/17/16.With stores closed and the website down, you absolutely MUST FILE A CLAIM to get your Limited gift card money back.
File a Limited Gift Card Claim here.
There is no guarantee you will get money back for your Limited gift card, but filing a claim is currently the only option.
There is no claim deadline set at this point.
American Apparel
American Apparel files for bankruptcy a second time.
American Apparel stopped selling gift cards.American Apparel says gift cards may not be accepted after 12/31/2016.There is no claim deadline set at this point.

Prime Clerk is handling American Apparel bankruptcy claims. Though using your gift card immediately is the best choice, file a claim if you’re unable to do so.
Golfsmith files for bankruptcy.

Dick’s Sporting Goods buys GolfSmith.
Golfsmith stops selling gift cards.Golfsmith stops accepting gift cards in closing locations. Dick’s Sporting Goods will honor gift cards under “Golf Galaxy” temporarily.There is no claim deadline set at this point. Use GolfSmith gift cards at Golf Galaxy urgently or file a claim immediately.

Prime Clerk is handling the Golfsmith bankruptcy claims.
Logan’s Roadhouse
Logan’s Roadhouse files for bankruptcy.
Logan’s Roadhouse continues to sell gift cards both online and in stores.Logan’s Roadhouse continues to accept gift cards in all restaurant locations that are still open.There is no claim deadline set at this point.
Hastings files for chapter 11.
Hastings stops selling gift cards.Hastings is accepting gift cards through August 23. 2016.

According to the company website, Hastings is evaluating potential buyers for the sale of the business.
There is no claim deadline set at this point.

If you miss the opportunity to use an outstanding Hastings gift card, file a gift card claim for Hastings.
Aeropostale files for chapter 11.

Aeropostale seeks sale of company instead of restructuring.

Versa capital might buy Aeropostale to save the store. (Versa bought Wet Seal out of bankruptcy last year and gift cards remained active.
Aeropostale gift cards are still being sold online and in stores.Aeropostale gift cards are still being accepted online and in stores.

According to this Aeropostale press release, the company has asked the courts for permission to honor all outstanding gift cards in full. An SEC Filing at the end of 2015 listed accrued gift cards at just over $16 million.
There is no claim deadline set at this point as gift cards are still being accepted.

If you miss the opportunity to use an outstanding Aeropostale gift card, file a gift card claim for Aeropostale.
Sports Chalet
Sports Chalet announces it is closing all stores. The company has not filed for bankruptcy protection, but is going out of business.
Gift cards are no longer sold.Sports Chalet gift cards are accepted through May 31, 2016.Per the Sports Chalet website, customers who are unable to visit Sports Chalet before May 31 are invited to transfer gift card balances to a gift card from Eastern Mountain Sports or Bob’s Stores through July 29th, 2016. To transfer your balance, contact customer service at (888) 801-9162.
Sports Authority
Retailer files for chapter 11.

Company sends email to rewards customers that says, “We will continue to sell Sports Authority Gift Cards through May 24, 2016. Gift cards will be honored through June 28, 2016.”
Gift cards are being sold through May 24, 2016.Gift cards will only be honored through June 28, 2016.Sports Authority reports $93 million in outstanding gift cards throughout bankruptcy proceedings.

If you miss the opportunity to use the gift card, file a gift card claim as an unsecured creditor.
Hancock Fabrics
Retailer files for chapter 11.

Hancock Fabrics announces all stores will be closed.
Michael’s purchases Hancock Fabrics. Gift Cards not part of the sale.
Hancock Fabrics gift cards are no longer being sold.Hancock Fabrics stores are all closed and the website is down. Gift cards are no longer accepted.If you missed the opportunity to use an outstanding gift card, file a gift card claim for Hancock Fabrics.
A&P Supermarkets
Retailer files for chapter 11.
A&P gift cards are no longer being sold in stores.According to customer service, A&P gift cards are redeemable until all locations are closed.File a gift card claim for A&P by November 30, 2015.

Missed the deadline? Still worth filing a claim to see if courts will honor it.
City Sports
Retailer files for chapter 11.

Gift card holders file lawsuit against City Sports to be considered priority claim. Denied.
City Sports stops selling gift cards.City Sports stops accepting gift cards.At time of lawsuit, the estimated value of outstanding gift cards is $1.2M (per lawsuit details).

File a gift card claim for City Sports. Deadline TBD.
Frederick’s of Hollywood
Frederick’s of Hollywood files Chapter 11

WSJ reports bankruptcy courts approve sale of Frederick’s of Hollywood to Authentic Brands who will continue store online only.
According to customer service representative, the company stopped selling gift cards shortly before filing.Frederick’s of Hollywood is no longer accepting Gift Cards.It’s too late to file a claim, but if you call the new Frederick’s of Hollywood customer service and provide the number of your physical gift card, you will receive a promo code for 30% off a purchase.
Simply Fashion Stores

Dots and Simply Fashion Stores file Chapter 11

WSJ reports that going-out-of-business sales are underway.
According to customer service agent, gift cards are no longer available.According to customer service agent, promotional gift cards have expired, but Fashionista cards with a balance are still redeemable in stores.

5/7/15 – WSJ reports gift cards will be accepted through the end of the sales.
File a gift card claim with Simply Fashion Stores’ bankruptcy administrator by
August 25, 2015.

Missed the deadline? File a gift card claim anyway. There’s no guarantee your claim will be processed, but worth a try.
RadioShack files Chapter 11

4/1/15 – RadioShack sold, Sprint takes over.

8/28/15 – RadioShack settles lawsuit with Texas Attorney General to honor gift cards.
RadioShack stopped selling gift cards.After initial March 6 deadline extended, RadioShack stopped honoring gift cards March 31, 2015.

RadioShack reported $44 million in outstanding gift cards.
File at claim at by December 2, 2016.

Paid-for gift cards will have priority over gift cards obtained through merchandise credit, customer dispute resolution, etc.
C. Wonder
C. Wonder files Chapter 11
C. Wonder stopped selling gift cards.C. Wonder gift cards no longer accepted.Although the deadline has passed, you may still try to File a gift card claim with C. Wonder’s claims agent.
Deb Stores
Deb filed Chapter 11

Going-out-of-business sales at all locations
According to store officials, Deb stopped selling gift cards when the going-out-of-business sale began on 1/8/2015.Deb stopped accepting gift cards on March 8, 2015.File a gift card claim for Deb Stores. Deadline TBD.

Gift Card Girlfriend Note: A company that appears on the Watchlist is currently in or has recently filed for Chapter 11 bankruptcy protection. When a store emerges from bankruptcy and continues to accept previously-issued gift cards, the store will be removed from the Watchlist and moved to the “Full Recovery” section. If the store closes or restructures but no longer accepts previously issued gift cards, the company will be moved to the Gift Card Graveyard when the bankruptcy case is closed. This list is updated almost daily as bankruptcy news is received.

Massive store closings are often a sign of financial distress. Read this article on Nine Retailers Closing the Most Stores for more information.

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Gift Cards Making a Full Recovery

A primary reason to honor gift cards while in Chapter 11 is to maintain goodwill among existing consumers. The idea is to keep customers happy (and shopping) while the store restructures. The merchants listed below emerged from bankruptcy and continued to honor outstanding gift cards issued prior to filing for bankruptcy–even if a new store owner took over.

MerchantFinancial StatusNew Gift CardsOutstanding Gift Cards
PacSun emerges from bankruptcy.
PacSun gift cards are still being sold online and in stores.PacSun gift cards are redeemable in all locations and online.
Retailer emerges from bankruptcy.
Quiksilver gift cards available and redeemable in all locations and online.According to customer service, Quicksilver gift cards are redeemable in all locations and online.
Fresh Produce
Fresh Produce files Chapter 11

WSJ reports liquidator will start going-out-of-business sales by 5/15/15 if no rescue buyer is found.

5/11/15 – Blue Stripe agrees to buy Fresh Produce stores and keep more than half open.
Fresh Produce continues to sell gift cards.According to the Fresh Produce website, stores continue to honor gift cards.

4/29/15 – Company currently has court approval to continue accepting gift cards throughout restructuring.

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RIP: The Gift Card Graveyard

borders bookstore
photo credit: Borders Book Bankruptcy? via photopin (license)

When a merchant files for Chapter 11 Bankruptcy, there is a possibility that the store will recover. But there is also the possibility that the store will be shutdown or that a new owner will take over. In either of the latter cases, outstanding gift cards may suffer an early demise, leaving gift card holders to mourn the loss of millions of dollars. Below is a list of gift cards that are defunct as a result of restructuring.

Gift CardTime of DeathEstimated Loss
Anna’s Linens
  1. 6/8/2015 – Anna’s Linens files for Chapter 11.
  2. 6/19/2015 – Hilco Merchant Resources & Gordon Brothers buys Anna’s Linens and closes all stores.
  3. 7/14/2015 – Gift card deadline.
Dollar value of outstanding Anna’s Linens gift cards unknown.
  1. 1/23/2015 – SkyMall files Chapter 11.
  2. 4/1/2015 – C&A Marketing buys SkyMall out of bankruptcy.
  3. Per customer service, “The former ownership of SkyMall filed for bankruptcy in early 2015. We, the new ownership, purchased SkyMall in name only and, per the terms of the purchase, did not acquire any liabilities associated with the former ownership. Gift cards that were purchased under the previous ownership are not being honored.”
Per attorneys for the unsecured creditors, “monthly operating reports filed early in the bankruptcy cases disclosed gift card liability of approximately $325k.”
dElia’s (dELiA*s)
  1. 12/8/2014 – dELiA*s filed Chapter 11
  2. 1/24/2015 – dELiA*s stopped accepting gift cards.
  3. 5/1/2015 – Delia’s sold to FAB NY with plans to re-open as online store.
  4. 8/7/2015 – Delia’s re-opens online.
  5. Delia’s Gift cards sold in 2014 or earlier will not be accepted.
Gift card loss unknown.
  1. 2/4/2015 – Caché files Chapter 11.
  2. 3/4/2015 – Cache Stores to Start Going-Out-of-Business Sales.
  3. 4/5/2015 – Caché reports it will only honor gift cards through April 5, 2015.
On 3/25/14, MarketWatch reported that Cache “recorded breakage income of $242,000, $275,000 and $642,000 during fiscal years ended 2013, 2012 and 2011, respectively.”
The Sharper Image
  1. 2/19/2008 – Sharper Image filed for Chapter 11, deeming all outstanding gift cards unusable.
  2. About a month later, store allowed gift card holders to redeem gift cards if they spent double the amount of the card.
  3. 6/8/2011 (3 years after the initial filing) – Company allowed gift card holders to file claim to be compensated for unused gift cards. Those who could provide documentation of having a gift card took priority over those without documentation.
  4. Sharper Image website in operation today is not the same company as the former store, thus gift cards purchased at the stores will not be honored. Only egift cards ordered from the website after January, 27, 2011 are accepted.
Est. $19M before claims accepted in 2011.
  1. 2/2011 – Borders filed for Chapter 11, but allowed customers to use gift cards until last day of going-out-of-business sale.
  2. 6/1/2011 – Courts set deadline for filing claims but company did not notify gift card holders that they had to file claims to receive payment for outstanding gift cards. No gift card claims were filed. When group of customers complained after deadline, courts said it was too late.
  3. Barnes and Noble acquired some of Borders assets as well as their trademark and customer lists, but would not honor outstanding gift cards.
  4. 10/31/2014 – Group of jilted Borders gift card holders fight to get cash back for unused gift cards. Courts again rule unredeemed Borders gift cards are worthless.
Est. $210.5M
Coldwater Creek
  1. 4/11/2014 – Coldwater Creek filed for Chapter 11, but allowed customers to use gift cards throughout process.
  2. Store bought out by new company that kept name and website, closed stores.
  3. According to new company website, “Coldwater Creek in its original incarnation went through the bankruptcy process, which makes it impossible to honor any financial agreements with the previous company.”
Est. $6.5M at time of filing.
Linens ‘n Things
  1. 5/2/2008 – Linens ‘n Things filed for Chapter 11. The store allowed gift cards to be used, but also continued to sell gift cards up until three days before the stores closed for good.
  2. Gordon Brothers Group bought business, retained name and website, but closed physical locations.
  3. New website says, “We are sorry, but we cannot accept gift cards issued by Linens N’ Things (“LNT”) prior to February 15, 2009.”
Gift card loss unknown

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Chapter 11 Bankruptcy Video Transcript

Below is the transcript from the video above on what happens to gift cards when a store files for Chapter 11.

Hi, I’m Shelley Hunter, Gift Card Girlfriend, and I want to talk to you about what happens to gift cards when a store files for Chapter 11.

Question: What happens to gift cards when a store files for Chapter 11?

When a store files for Chapter 11, the company has to ask the bankruptcy courts for permission to continue accepting gift cards. In some cases, permission is granted and gift cards are accepted throughout restructuring, but in other cases a deadline can be set which means the stores are only allowed to accept gift cards for a limited period of time.

Question: Why don’t stores stop selling gift cards immediately when they go into Chapter 11?

Typically a company enters Chapter 11 with the intent to emerge and continue as a stronger organization. In the case of The Sports Authority, for example, the company initially announced that they would close some stores, but consumer programs such as their gift cards and loyalty benefits would not be impacted. When the company failed to reach a deal with creditors and lenders, however, the store had to auction off all of its assets instead.

Outstanding gift cards are liabilities that don’t go with the sale. That’s where the gift card deadline comes in.

With the courts permission, consumers are given a short window of opportunity to use their gift cards.

Question: Why don’t gift card laws protect consumers in this situation?

Gift card laws that prevent expiration on closed loop gift cards are essentially useless if the company holding the gift card liability goes out of business.

Question: What should you do if you have a gift card to a store in Chapter 11?

I always advise using gift cards as soon as you get them. The longer you hold onto a gift card, the more likely you are to lose the card or simply forget you have it. If you have a gift card for a store in Chapter 11, however, the urgency is even greater.

Use the gift card immediately. Buy something for yourself, pick up a gift for an upcoming graduation, wedding or birthday present. Or buy products you can donate to a local charity. Just don’t let the gift card go to waste.

Question: What if I miss the deadline and still have a gift card?

If you missed the deadline and still have a gift card, here are two things you need to do. First, file a claim. As an unsecured creditor, your claim will only be paid after all of the secured creditors receive their money so there’s no guarantee you’ll be reimbursed, but there is a chance. Secondly, hold onto the card or at least take a picture of the front and back of it. In some cases, lawmakers have stepped in after a gift card deadline to force a company to accept claims for an extended period of time. But you’ll need to know the gift card number and have proof of ownership in order to file a claim.

Filing instructions for all of the stores currently in chapter 11 are on my Gift Card Watchlist at

Gift Card Holders Need Protection

I normally only see the good in gift cards, but this situation has caught my attention. I understand shutting down stores. I understand that gift cards can’t be used once a store goes out of business. But I don’t understand why outstanding gift cards can’t be used when a store continues to operate–even if that operation is under the direction of a liquidation company. As long as the doors are open and there is inventory to buy, consumers who have already given the store money in exchange for merchandise should be allowed to collect. (Since statistics consistently show that shoppers with gift cards overspend the value of their gift cards, the liquidation company has the opportunity to move more merchandise by accepting outstanding cards than not.) If the business does eventually close, I believe the courts should treat gift card holders as a group of creditors who are collectively owed several million dollars versus a bunch of individual creditors owed a small sum. (Radio Shack is said to have $44 million in outstanding gift cards.) While I’m not ready to go “Legally Blonde” on this issue, I do think some type of reform is in order. Anybody else?

If you know of other gift cards in jeopardy, add your comments below or reach out to me on Twitter (@GCGirlfriend).

Happy Gift Carding!

~Shelley Hunter, Gift Card Girlfriend

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