If the retailer does not file for bankruptcy, but simply closes, that does not necessarily mean that you won't be able to use your gift certificate. Some businesses file in state court for an "assignment for the benefit of creditors," and that procedure may also provide for an orderly distribution of assets. Some businesses may otherwise provide for a way to transfer the value of a gift certificate to another location or to someone who buys the customer list.
If a business unfairly took advantage of consumers, the AGO may also bring a legal action seeking recovery of the value of unredeemed gift certificates or gift cards. Contact the Public Inquiry & Assistance Center for help.
If the retailer files for the protection of the bankruptcy court, you should file a document called a "proof of claim" with the court. Include whatever information you have about the value of the certificate, and a photocopy of the certificate or gift card. Bankruptcy allows for the payment of claims depending on assets available.
If a company has announced that it has filed for Chapter 11 bankruptcy and is "reorganizing," the company may ask the court for the ability to honor gift certificates. It may be in the best interests of a company to maintain goodwill if it wants to continue operating, so this request makes good business sense, but it is not always certain that this request will be made to the court.
If a company files for "liquidation" in bankruptcy, through Chapter 7, there may not be assets available to pay off all or even some of the value of consumer gift certificates. Some bankruptcy courts consider gift certificates to be "consumer deposits" under the bankruptcy code, entitled to certain unsecured creditor priority over some other claims, but not all courts consider this to be the case.