Toys R Us gift cards are likely to become worthless within weeks.
The best advice: Spend them immediately, if possible.
Make haste because after the big-box icon of American retail said Thursday that it would close all of its U.S. stores, there's not much time left.
The chain plans to honor gift cards for the next 30 days, Toys R Us spokesperson Taylor O'Donnell told USA TODAY on Thursday in an email.
In bankruptcy, retailers technically don't have to honor gift cards at all. But most ask a bankruptcy court judge for permission to do so — at least for a while.
Toys R Us has been honoring gift cards since it filed for Chapter 11 bankruptcy in September. But now that the company has filed to liquidate its U.S. operations, the end is near.
Even if the chain had decided to honor gift cards until the bitter end, customers might not find anything worthwhile to spend them on after a few weeks of going-out-of-business sales.
After Toys R Us is gone, your gift card will be worth only the plastic it was made with.
Unfortunately, some customers think gift cards last forever. After the 2011 liquidation of bookstore chain of bookstore chain Borders Group, a group of gift card owners fought for years in court to obtain the value of their assets.
"Gift cards are, technically, unsecured debt of the bankrupt retailer and bankruptcy law gives them no special protection," said Melissa Jacoby, a bankruptcy law professor at the University of North Carolina at Chapel Hill.
One lawmaker is hoping Toys R Us will take the unusual step of redeeming gift cards for cash.
U.S. Senate Minority Leader Charles Schumer, D-New York, sent a letter Wednesday to the acting chairwoman of the Federal Trade Commission, asking her to act to ensure that consumers have time to use their existing gift cards.
Ideally, consumers would be able to redeem the gift cards for cash, Schumer wrote.
"I also ask the FTC to do what it can to ensure that Toys R Us is taking every possible step to honor its existing terms of service for its gift cards," Schumer wrote to Maureen Ohlhausen, the acting chair.
"It is critical that consumers have a full opportunity to take advantage of their gift cards before the stores close."
With Toys R Us going away, a group of liquidation firms will be responsible for selling off the rest of the chain's inventory.
"Use those gift cards ASAP," the Better Business Bureau said on its website in advice for customers of bankrupt companies. "Businesses that have entered into the liquidation process will not be around for very long and BBB advises consumers who are holding gift cards spend them as soon as possible or risk getting stuck with a worthless piece of plastic."
Contributing: Chris Woodyard
