Got a gift card? Spend it quickly!

How many old gift cards are you carrying around in your wallet? And how many are at the back of the drawer in your kitchen? If you are like most people, you probably have a decent number of gift cards hanging around and, while you expect to use them some day, you never seem to get around to it.

But did you know that if a retailer enters bankruptcy proceedings, they probably don't have to honor your gift card even if the store is still open? It might surprise you to know that bankruptcy courts consider gift cards to be loans to the company. If a merchant wants to be able to honor gift cards while it is in bankruptcy proceedings, it has to petition the court to allow such an action. Shoppers can lose the value of the card if the merchant doesn't make the request or if the court denies the request.

Fortunately, these rules might be changing. The Consumers Union filed a petition last week with the Federal Trade Commission to require retailers to honor gift cards as long as the store is still open. For more information on this effort, check out this article in The Baltimore Sun.

The take-away from this story? Get out there and start spending those gift cards. You never know when a company might declare bankruptcy. The Sharper Image and Linens and Things are two high profile retailers who recently declared bankruptcy.