Are you holding an invalid gift card?

SAN FRANCISCO (3/12/08--Waiting for the right moment to spend that gift card in your wallet? That moment may have passed if the card is from a retailer going through bankruptcy (MarketWatch.com March 3).

Sharper Image is one example. The retailer is under Chapter 11 bankruptcy and has stopped accepting gift cards until further notice.

With the number of retail bankruptcies expected to jump to the highest level since 1991, those other gift cards in your wallet may become void as well (yahoo.com Mar. 3).

What can you do to prevent that birthday or holiday gift from turning into a worthless piece of plastic? These tips may help you recoup your losses:

Use them quickly. Take a trip to the mall and use that gift card as soon as possible. If you wait too long, you run the risk of a retailer deciding not to honor the card, or the card could lose value, depending on the store's gift card policy.

Read the fine print. Whether giving or receiving, check out the back of the gift card or go to the company's website for the gift card policy. It should tell you how you can redeem the card and whether there are conditions that may reduce the card's value.

Contact the competition. If you're stuck with a card that the original business won't honor, contact the competition and ask for a special exception. For example, Brookstone stores are offering 25% off Brookstone merchandise if a customer presents a Sharper Image gift card of any value. The competition sees it as a way to gain customers; consumers see it as a way to get something for their seemingly worthless gift card.

Hang on to it. If all else fails, keep the card in a safe place and hope that the retailer will begin honoring gift cards again soon. A retailer coming back from Chapter 11 bankruptcy will be eager to drum up business to keep the company afloat.

For more information, listen to "Gift Card Do's and Don'ts" radio segment in Home & Family Finance Resource Center.

courtesy of cuna.org