Lost in Limbo - Radio Shack Gift Card Owners Left Holding the Card

The storied franchise RadioShack may have crashed and burned in February when it filed for bankruptcy, but the big R emerged like a phoenix from the ashes when a hedge fund scooped up the assets at a bargain and decided to re-introduce the brand. But what happened to the holders of $43 million in outstanding RadioShack gift cards bought prior to the bankruptcy? So far, they are still holding their cards.

Unused gift card balances most often become worthless when the company goes into bankruptcy, which is why it's important for consumers to pay attention to the financial health of their favorite big retailers. In the case of RadioShack, $43 million is an awful lot of unclaimed birthday gifts, which is why it attracted the attention of legal types like Texas Attorney General Ken Paxton. Paxton and his colleagues filed a lawsuit agains RadioShack in bankruptcy court in an effort to protect state residents who hold some of these gift cards. He's encouraging other state attorneys to do the same.

Of course, RadioShack is fighting back, claiming there already is a process in place for filing claims for recovering monies lost in unredeemed gift cards. The lawsuit alleges RadioShack never provided consumers with information as to how to file a claim. Even if the lawsuit is allowed, there is no guarantee any of the $43 million outstanding will go back into consumer's pockets. Lesson for consumers: spend your gift cards as soon as you receive them and spend it all!