It may be time to use up any Circuit City gift cards you may still have. As detailed in this post at The Consumerist, between the stock’s collapse, the firing of its CEO, the loss of a takeover bid, and a huge quarterly loss, things aren’t looking too good for the chain. And now comes news that Circuit City lost a recommendation from a firm that advises manufacturers on whether to ship merchandise to retailers, signaling that there is a strong belief that Circuit City may no longer be able to pay its vendors, which may result in manufacturers refusing to sell product to them out of fear of not getting paid. This would start a quick spiral of the company down towards bankruptcy.
If the company goes bankrupt, consumers holding gift cards are considered creditors and the gift cards may become worthless. That’s what happened to customers with Sharper Image gift cards when that company declared bankruptcy earlier this year.
There have been other examples where customers were allowed to redeem their gift cards after a bankruptcy, but to be on the safe side it may be a good idea to unload those cards now.
