When businesses close: gift cards, refunds, and unfulfilled orders
When a store, restaurant chain, or online retailer shuts down, customers are often left holding something of value: a gift card, store credit, a layaway balance, an order that never shipped, or a service plan. What happens to each of those depends on how the business is closing and what a court or the company says it will honor.
This guide covers the common situations and where to find reliable updates. If you paid for something that was never delivered, our explainer on customer refunds when a business closes covers card disputes and bankruptcy claims in more detail. This is general information, not legal advice.
KEY TAKEAWAYS
- Federal rules limit gift card expiration dates and fees, but they do not guarantee a card’s value if the business fails.
- A business in bankruptcy may keep honoring gift cards, limit them, or stop accepting them. Watch its official notices for cutoff dates.
- Deposits for layaway or special orders that were never delivered may qualify for priority in bankruptcy, up to $3,800 per person.
- Bankruptcy court records, claims agent websites, and your state attorney general are the most reliable sources of updates.
Gift cards
What federal rules protect
Federal rules under Regulation E set minimum protections for store gift cards and gift certificates while a business is operating:
- Expiration: the funds on a covered gift card generally cannot expire sooner than five years after the card was issued or money was last loaded onto it.
- Fees: dormancy, inactivity, or service fees are allowed only after 12 months with no activity, only one fee can be charged per month, and the fee must be clearly disclosed on the card.
Some cards are not covered, including loyalty, award, or promotional cards, and certain cards that are not marketed as gift cards. Many states add their own gift card rules.
What happens if the business files for bankruptcy
Those rules do not guarantee a card’s value if the business fails. In bankruptcy, a gift card balance is generally treated as a claim against the business. What customers can do in practice depends on the case:
- A business that is reorganizing often asks the bankruptcy court for permission to keep honoring gift cards so it does not lose customers. Even then, it may limit how they can be used.
- A business that is liquidating may accept gift cards only for a short period, or stop accepting them entirely.
- If the business stops honoring cards, the notices in the case will usually say whether gift card holders can file a claim and by what date.
The practical advice is simple: if a business you have a gift card for announces financial trouble, use the card soon, and keep the card and any receipt until you have used the full balance.
Store credit, returns, and closing sales
Store credit from a past return is usually treated much like a gift card balance. Return policies can also change once a business starts closing. Liquidation and “going out of business” sales often mark items as final sale or shorten the return window. Before buying, check the posted return policy, inspect the item, and keep the receipt.
Layaway, special orders, and deposits
If you paid toward an item that has not been delivered yet, such as a layaway plan, a custom furniture order, or a deposit for an event, ask the business in writing whether it will deliver the item or refund the money. If you paid by credit card, a billing dispute may be available within the federal deadline.
If the business files for bankruptcy, federal law gives individuals a priority claim for deposits on personal or household goods or services that were never delivered, currently up to $3,800 per person. Priority improves your place in line but does not guarantee payment.
Warranties and service plans
Who issued the warranty matters. A manufacturer’s warranty normally comes from the manufacturer, not the store, so it may not be affected when the store closes. An extended warranty or protection plan sold by the store may be handled by a separate plan administrator. Read the plan documents to find the company responsible for claims, and contact it directly.
Memberships and recurring charges
Gyms, clubs, and subscription services sometimes keep billing after they stop providing the service. Cancel in writing, keep a copy of the cancellation and any confirmation, and check your statements for later charges. If charges continue, contact your card issuer or bank. Our guide to canceling subscriptions and memberships covers the process in more detail.
| If you have | What to check | What to do |
|---|---|---|
| A gift card or store credit | Whether the business is still accepting it, and any cutoff date in its notices | Use it promptly. Keep the card and any receipt in case you need to file a claim. |
| A layaway or special order | Whether the order will be filled or refunded, and how you paid | Request delivery or a refund in writing, dispute a credit card charge if eligible, and watch for claim deadlines. |
| A purchase made during a closing sale | The return policy posted at the time of sale | Inspect items before buying and keep the receipt. “Final sale” terms are common. |
| A warranty or service plan | Who issued it: the manufacturer, the store, or a third-party plan provider | Read the plan documents and contact the company named as responsible for claims. |
| A membership or recurring charge | Whether billing continues after the business stops providing service | Cancel in writing, keep confirmation, and check your statements for later charges. |
General guidance as of October 2026. Court orders in a specific bankruptcy case and state law can change what applies.
Where to find official updates
Closure news spreads quickly, but details in social media posts and secondhand reports are often wrong. These sources are more reliable:
- The company’s own notices on its website, in email, or posted in stores, especially notices that name a court or a deadline.
- The bankruptcy court case. Large cases often have a free website run by a court-appointed claims agent, with notices, deadlines, and claim forms.
- PACER, the federal courts’ online records system, where you can read case filings. It charges $0.10 per page, capped at $3 per document, and fees are waived if you spend $30 or less in a quarter.
- Your state attorney general or consumer protection office, which may publish guidance for customers of a closed business and accept complaints.
- Your state’s business registry, usually run by the secretary of state, which shows whether a company is still active.
Checklist: what to do now
- List what you have. Write down every gift card balance, store credit, open order, deposit, warranty, and membership with that business.
- Use gift cards and store credit promptly while the business is still accepting them.
- Request refunds or delivery in writing for open orders and deposits, and keep copies.
- Check your payment options. A credit card dispute may be available for goods or services you never received.
- Follow the official case notices for claim deadlines if the business filed for bankruptcy.
- Cancel recurring charges and watch your statements.
Frequently asked questions
Can a gift card expire?
Under federal rules, the funds on a covered store gift card generally cannot expire sooner than five years after the card was issued or last loaded. Some states give more protection. Those rules apply while the business is operating, and do not guarantee the card can be used if the business closes.
Will a store in bankruptcy still take my gift card?
It depends on the case. A business that is reorganizing often asks the court for permission to keep honoring gift cards, sometimes with limits. A liquidating business may accept them only briefly or not at all. Check the company’s notices or the case website.
Can I return something I bought at a closing sale?
Often not. Closing sales frequently mark items as final sale or shorten return windows. Check the posted policy before you buy, inspect the item, and keep the receipt.
Is my warranty still valid if the store closed?
A manufacturer’s warranty usually continues because it comes from the manufacturer, not the store. For an extended plan bought from the store, check the plan documents to see which company handles claims.
How do I find out if a company filed for bankruptcy?
Start with the company’s website and customer notices, which usually name the court. You can also search federal court records on PACER, and large cases often have a free claims agent website with notices and deadlines.
Sources
- 12 C.F.R. § 1005.20, Regulation E (gift cards)
- 11 U.S.C. § 507, bankruptcy priorities
- U.S. Courts, Chapter 7 Bankruptcy Basics
- PACER, pricing and fee waivers
More coverage is in our Business & Bankruptcy section. This article is general information, not legal advice. See our Legal Disclaimer. Spot an error? Read our Corrections Policy.
