State AGs And Former RadioShack Reach Unredeemed Gift Card Settlement

There’s good news for holders of old RadioShack gift cards: people who purchased cards directly at stores or from gift card kiosks will get their money back, instead of either forfeiting the funds or filing a claim in the bankruptcy, metaphorically getting in line behind companies owed thousands or millions of dollars.

That’s how it normally works in retail bankruptcy: customers have a brief period to make it to the store after bankruptcy to use up their cards, and the cards lose their value as soon as liquidators swoop in, if the entire chain or your local store is shutting down. You might get a few pennies on the dollar, if anything, from filing a bankruptcy claim. Sometimes competitors offer discounts in exchange for defunct companies’ gift cards, as Toys ‘R’ Us did when Kay-Bee Toys closed.

The attorneys general of several states arranged this deal, led by RadioShack’s home state of Texas. “Today’s settlement agreement confirms that consumers can have their voice heard even in large bankruptcy cases, and that former RadioShack customers will be treated fairly in the bankruptcy process,” the lead attorney on this case for Texas, Assistant Attorney General Hal Morris, said in a statement.

Customers who have gift cards they received when returning merchandise or as bonus deals, which are the majority of the outstanding gift cards are less lucky. While the AGs are working on a deal with the bankruptcy court and the new owners of the RadioShack brand, it wouldn’t get consumers back the full value of their cards. One option could be that the 1,750 RadioShack stores run in a joint venture by one of RadioShack’s biggest lenders and mobile carrier Sprint would let card holders have a 50% discount. The parties will negotiate that at the hearing next week that was originally scheduled to discuss all of the gift cards.

The site for gift card claims will be You have one year to find the gift cards lurking in your old wallets and junk drawers.

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