Some gift cards sold at Costco are now worthless

Shoppers who bought Synergy restaurant gift cards at Costco may be in for a costly surprise.Synergy World, a gift and loyalty card company, abruptly shut down last month after filing for Chapter 7 bankruptcy protection. As a result, its gift cards can no longer be redeemed, leaving some consumers holding unusable balances with little immediate recourse.Synergy’s gift cards were third-party products. While they were sold at Costco and redeemable at hundreds of participating restaurants nationwide, the cards were issued and managed by Synergy – not Costco or the restaurants themselves.Once Synergy shut down, the cards effectively became worthless – a critical distinction for consumers, experts say.EDDIE BAUER RETAIL OPERATOR FILES FOR BANKRUPTCY, BEGINS LIQUIDATION SALESAs Bankrate analyst Ted Rossman told the San Diego Union-Tribune, a gift card "is basically a promise for future goods or services.""When the company behind that promise fails, gift card holders are typically unsecured creditors and end up near the back of the line," Rossman said.Synergy initially said gift cards would be honored through early February, but later halted redemptions altogether, citing a surge in demand. The total amount of money tied up in unredeemed cards will not be known until bankruptcy filings are made public.CHIPOTLE CEO ALLEGEDLY SUGGESTS COMPANY WOULD KEEP RAISING PRICES AND 'LEAN INTO' CUSTOMERS MAKING OVER $100KAdding to the confusion, some Costco locations have reportedly refunded Synergy gift cards while others have not. Costco did not respond to a FOX Business request for comment.The episode serves as a cautionary tale for shoppers who assumed buying gift cards at a trusted retailer offered added protection. According to a 2024 report from Bankrate, 43% of Americans hold unused gift cards, with an average balance of more than $240. CLICK HERE TO GET FOX BUSINESS ON THE GOExperts say consumers should understand who actually issues a gift card – and use third-party cards sooner rather than later.Weiter zum vollständigen Artikel bei FOX Business Weiter zum vollständigen Artikel bei FOX Business