Redeeming Funds on Gift Cards When a Store Closes Permanently

There is a pretty high probability that you have received a gift card before and used it in store, or perhaps you have given one to someone else as a holiday or birthday present. But have you ever had to deal with a gift card when the store it applies to is closing? While this is not super common, it is important to know your options, since you may be able to still use your gift card (or at least get credit for it) while the store is going through bankruptcy or is in the process of shutting down. Read on to learn how to redeem funds on gift cards when a store closes permanently.


Before all else, you should contact the business directly about redeeming funds, assuming they have not yet officially closed. Your succes will mostly depend on why the business is closing in the first place. If the business is doing so on its own volition and announces their upcoming closure, you should contact them immediately since you could likely still use your gift card or at least a certain percentage of the total amount.

On the other hand, if the business has gone bankrupt, you can still contact them directly, but your probability of success will be lower since this will require that they get permission from the bankruptcy court. You will be classified as an “unsecured creditor,” which usually takes last priority since other parties like business suppliers and loan holders would be repaid first.


You can also try contacting other parties about redeeming funds if you are not successful contacting the business directly. These include any of the following:

  • Original vendor – you may be able to swap the funds to use at another store if you bought your gift card from a vendor rather than from the store
  • Credit card company – you may be able to get a full refund through your credit card company based on consumer protection laws
  • Competing businesses – while unlikely, you may be able to transfer your funds or get a discount at competitor companies since they may try to bring you on as a new customer

If you have exhausted all of these options and still want to try to redeem your funds, there are still a few alternative options.


While it will more require time and energy, you can pursue legal action for redeeming funds on your gift card. If you are dealing with a local business, try contacting your state’s attorney general. If you are dealing with a larger establishment, then you can file a court claim. However, as mentioned previously, your success of redeeming funds during a bankruptcy process is low since you as a creditor take the lowest priority.

Finally, you can simply wait it out. While not ideal, there is still a small chance that the business will decide to stay open or manage to work their way out of bankruptcy. If this is the case, then your gift card may still be usable. There is no harm from holding out hope!


The extent to which you pursue any of the options above will likely depend on the value on the gift card. Just know that if you do find yourself with a gift card to a store that is closing permanently, you have a variety of different options at your disposal!