“My Gift Card’s Worthless? That’s So Unfair!” Cry Foul to the FTC

I don’t know about you, but with California schools on the skids, turning pockets inside out in a pathetic, penniless shrug, parents have been asked to contribute to fundraisers that also include purchasing ‘e-scrip’ and ‘gift cards.’

While it’s a seamless digital ‘give’ plugging in a school as a partner/affinity program, our nation’s economic disaster has put even the most solid institutions on shaky ground, much less brick-n-mortar retailers.

We count on certain things not to ‘break’ in our lives…the ground beneath us, the banks housing our assets, the homes sheltering our families, our families themselves…but alas, it’s pretty squishy out there lately, and the last thing we need is these freakin’ gift cards becoming worthless when we’re trying to ‘do the right thing’ and support a school or a cause.

Thankfully, Consumers Union filed a petition with the Federal Trade Commission (FTC) asking the agency to protect consumers from losing money on gift cards when retailers file for bankruptcy. You can sign the petition to join them here…

“Gift cards have exploded in popularity in recent years, but consumer protections haven’t kept pace with the record sales,” said the senior attorney for Consumers Union. Unfortunately, there is no guarantee that consumers will be able to redeem the full value of their gift cards from struggling or bankrupt retailers.”

Say what? Now you tell me!

“With more retailer bankruptcies on the horizon, the FTC should make sure that consumers with gift cards are protected when companies go bust.”

Teens should definitely ‘rage against the machine’ and sign the petition on that one, knowing peer preference for b-day gift cards and such!“

Oh! And get this:

“Bankruptcy courts treat unused gift card funds as a debt and determine whether or not the retailer must pay it. It’s up to the retailer to petition the court to allow it to continue to accept its gift cards. Consumers may lose the value of their gift card if the retailer doesn’t make such a request or if the court denies it. In these cases, the only remaining option for consumers is the cumbersome task of filing a claim as an unsecured creditor to the bankruptcy proceeding.”

So, gee…the onus is on us to beg, borrow and plea to have our money returned, and get in line with the bureaucrats to eke out any value in a gift card?

That’s like those ‘class action law suit’ papers that arrive as corporate junk mail from companies that have overcharged or filched funds from me in some manner only adding to the sting by becoming a time sink to try to recoup any loss. Just not even worth the effort to pull it out of the recycle bin…

Seems to me the loopholes keep favoring the big guys not the little ones, the corporations not the consumers, the bankers not the homeowners, and, well…er…don’t even get me started on the $700 billion bailout fiasco.

How can we teach children about money management when our country’s ‘oops’ factor is tipping into the trillions and future generations of kids are left holding the (empty) bag?

Okay, time for me to slip out of my cranky pants and into a soothing bubble bath to go soak my head for awhile.

But first? I’m signing the gift card petition to the FTC pronto…

It would require retailers to segregate funds generated from gift card sales in a trust account and honor a consumer’s gift card as long as the doors remain open unless a bankruptcy court orders otherwise.

It’s the least they could do. Really. Now about that $700 billion…

The Consumers Union was joined by the Consumers Federation of America, National Consumer Law Center and U.S. PIRG in asking the agency to require that gift card funds are put in a trust account so that the cards don’t expire when a company goes under.

Related Resources

9-24: Include Credit Card Reforms As Part of Any Bailout Package (C.U.)

9-23: House Passes Credit Card Reform Bill Re: Predatory Practices (C.U.)

How to Get Your Gift Card Money Back! (SavvyWallet)

Kiplinger’s Money Smart Kids (article compilation)

Wall Street Journal Blog: The Wallet

Financial Literacy for Kids: Money Lessons Should Start Young (Parenthood)

Do Financial Literacy Programs Teach Kids to Manage Money? (WSJ Digital)

Is Teaching Kids Financial Literacy A Waste of Time? (NYT Freakonomics Blog)

Financial Literacy for Kids

Independent Means.com: Joline Godfrey’s Site for Raising Fiscally Fit Kids

Girls Inc: Economic Literacy (for adults too!)

Creative Wealth International (formerly The Money Camp)

Financial Smarts for Students: The JumpStart Coalition

Interactive Games/Virtual Worlds/Financial Activities for Kids

Minyanland: Bulls/Bears and virtual critters teach money tips (w/NCEE)

iThryv: Newly launched online banking site for kids by Shryk.com

YoungInvestor.com (branded site/Columbia Mgmt. for kids, teens)


FunBrain: Changemaker Game



  1. Thanks for the info. They need to be sued the whole gift card thing is a scam. Back in the day I was fine with a birthday card and a $20.

  2. Whoa, Gina, you got a Jefferson? You’re younger than I then…I was thankful for $5. (heehe, sounding like Herb Caen now…) 😉

  3. Awesome post!

  4. thanks for the info you’ve posted, there is just so much info out there and this is such a tiresome topic to research 🙁

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