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What to do with unusable gift cards when companies go out of business

By Mike Headrick and Tania Mashburn  |  Posted Dec 11th, 2014 @ 10:37pm


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SALT LAKE CITY — Gift cards are still growing in popularity for Christmas gifts. In fact, sales are expected to top $124 billion this year alone. But what happens when you buy a gift card and the company goes out of business?

Ken and Rena Frandsen called the KSL Investigators when it happened to them. Just one month before Hollywood Connection in West Valley City closed down, the Frandsens bought six gift cards to give as Christmas gifts.

"We wanted to find the perfect place for the kids to take their kids and spend the day together as a family," said Rena Frandsen.

The gifts cards totaled $105 but the Frandsens were afraid they were now worthless.

"We didn't know if we'd be stuck on the line for useless cards," said Ken Frandsen.

"I don't think gift cards should be sold anywhere if they know a location is going out of business," said Rena Frandsen. "It's just bad practice. It makes you leery of gift cards, any kind of purchases like that."

Hollywood connection was owned by Carmike Cinemas, based in Columbus, Georgia. Carmike is one of the largest movie theater companies in the United States and operates nearly 300 theaters nationwide. But trying to get someone on the phone seemed to be an impossible task for the Frandsens and the KSL Investigators.

So what options do you have if you have gift cards for a company that goes out of business?


I don't think gift cards should be sold anywhere if they know a location is going out of business. It's just bad practice. It makes you leery of gift cards, any kind of purchases like that.

–Rena Frandsen


First, try calling the company. Ask for a refund or find out if there's anywhere else you can use your gift card.

That obviously didn't work for the Frandsens, so you can always file a complaint with the Department of Consumer Protection (dcp.utah.gov), and see if you can get your money back that way.

Another option, call your credit card company or your bank. That's what the Frandsens ultimately did, and it worked. Their bank refunded their money and now the bank will go after Carmike.

Finally, try asking a competitor if they'll redeem the gift card. Seems like a long shot, but it just might work. KSL Investigators called up Classic Fun Center in Sandy. They said they would be happy to honor any Hollywood Connection gift cards floating around out there.

"We want to help people out," said Jard Halls, general manager of Classic Fun Center. "Anybody who has a gift card from Hollywood Connection, bring it down here to Classic Fun Center and we'll take care of you one way or another."

Note that Carmike representatives did eventually respond to the Frandsens voice messages, approximately three weeks after they started making calls. The Frandsens were told a refund could be issued.

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Mike Headrick
Tania Mashburn
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