My Blog, Your Money

It’s no secret that gadget retailer The Sharper Image hasn’t been doing too well lately.  In fact, it recently filed for that dreaded Chapter 11 bankruptcy.  Not only does this leave the futures of many of its employees in doubt as it starts shutting down stores, but also those with active gift cards will find their cards to be worthless.

The lesson here?  If it’s not obvious already: don’t buy gift cards in retailers that are likely and if it looks like a retailer is going under, try to use up its value before a bankruptcy leaves you with worthless plastic.

There is some salvation for those Sharper Image gift card holders though.  As noted in the article, rival Brookstone will give you 25% off for redeeming a Sharper Image gift card.  That’s not a bad deal for those applicable and it’s a great way for Brookstone to drum up some business.  And if 25% of the value of your purchase is greater than the value of the gift card, you would actually save a few bucks if not more.

For those in California (sorry, non-Californians), another possibility is the recent legislation that passed entitling a consumer to redeem a gift card for cash if its balance is less than $10.  The law is pretty new so expect some difficulties as retailers upgrade their systems to comply with the new law, but it’s worth a shot.  If you have a gift card greater than $10, I wonder if you could use it to purchase multiple gift cards each with a balance of less than $10 and the redeem each one for cash.  If somebody out there attempts this, please leave a comment about your experience.

Update, 3/10/2008:

The Sharper Image announced that it will be honoring its gift cards again, but there are 2 conditions:

1. they must be redeemed in full in one transaction
2. customers must purchase an item that costs double the value of the gift card or merchandise

The conditions really gum things up a bit, but if you have a Sharper Image gift card, it’s another option you didn’t have before.