Gift Cards May Not Be Your Best Bet

Buyer Beware as Bankruptcies Rise

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    NEWSLETTERS

    AP
    Giving gifts might be better than giving gift cards as bankruptcies rise this holiday season.

     Store closing. Everything on sale. The signs at McKinney's Circuit City draw in customers like Mary Ann Cowley looking for one thing.

    "Bargains," she says with no hesitation.

    "We were going to Target; saw the store closing sign and said, 'Ooh! Let's see if they have anything good on sale."

    Are Gift Cards Wise In Tough Economic Times?

    [DFW] Are Gift Cards Wise In Tough Economic Times?
    Retail stores declaring bankruptcy may lead to gift cards that are worthless.

    People like Virginia Gamez found them.

    "This is a 37 inch (television). Less than 500 dollars," says Gamez. 

    Craig Bobbett was not as impressed. 

    "They're making it look like it's a really good deal on the outside, but it's typical day after Thanksgiving stuff on the inside. No big deal," says Bobbett.

    With a slowing economy and Christmas around the corner, shoppers will no doubt be drawn to struggling stores slashing the prices.

    Experts say the clearance sales are a great place to get a deal, and in most cases, the manufacturer warranty will still apply. 

    But Mike Cox with the Cox School of Business does have one warning when it comes to buying one popular gift item from stores with uncertain futures.

    "I'm a little suspicious of gift cards. There's always the possibility that the store will disappear, and it will be hard to use those gift cards," says Cox.

    Just last week, a bankruptcy judge said Circuit City could continue its gift card program.