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We’ve received several viewer emails in recent weeks asking what, if anything, can be done when a business closes its doors and you still have a gift certificate or packaged visits left.

One came from a woman named Shelby who spent $200 in September for 18 months of laser treatments at Smooth Medical Spa in Cherry Creek.

The business closed in March – leaving Shelby about a year short on her 18-month package.

For answers, we turned to the Denver chapter of the Better Business Bureau, state law and the Colorado Treasurer’s office.

“Unfortunately, there’s not a lot that can been done with a gift card or gift certificate once a business goes out of business,” BBB spokeswoman Krista Ferndelli said.

Your best bet is to reach out to the company’s owner directly and try to work something out, Ferndelli said.

You can ask neighboring businesses if they know how to reach the owner, or try calling the former landlord if the business didn’t own its location.

If the business filed for bankruptcy using Chapter 7, you may be able to recover your money.

But you’d have to file what’s called a proof of claim with the bankruptcy court and get in line.

Courts decide the order people get paid when a company goes bankrupt, and people with unused or partially used gifts cards get sent to the back of the line.

The company must pay the government for any back taxes, secured creditors like banks and employees first.

“That usually depletes available assets,” according to the BBB’s website.

If a business filed for Chapter 11 bankruptcy, a court decides if the business must honor gift cards or certificates.

The website keeps a list of major retailers who have started the bankruptcy process, and what you can do with your unused gift cards.

Colorado law sets limits on when gift cards and certificates can expire and what fees a company can charge. It doesn’t say anything about people getting their money back when a business closes.

“Anytime that you’re purchasing up front those types of packages for several months of different services or for services in advance, you’re running a risk of whether or not that business will still be operating when you go to use it,” Ferndelli said.

It’s not something most people think about when they buy a gift certificate or package of services, but it should be.

“Most of the time a consumer is going to recognize some substantial savings going with a package, but the risk threshold is just another consideration before you decide,” Ferndelli said.

She advised that people ask to see the terms and conditions on a package or gift card before they buy it.

Sometimes it will spell out what the business will and won’t do in the event it goes out of business.

“If they don’t, that’s where you know you’re dealing with increased risk,” Ferndelli said.

There is another way Coloradans can get money back from gift cards or certificates, and that’s through the state Treasurer.

Companies who sell more than $200,000 worth of gift cards a year aren’t allowed to keep that money as revenue if the card goes unused.

The law says those companies must turn the value left on the card over to the state Treasurer after a set period.

The money goes into what’s called the unclaimed property database.

You can claim that money using your name or the serial number on the gift card or certificate.

This is helpful to people who find an old gift card crammed in the back of their desks, but it wouldn’t help people like Shelby because a customer has several years to use his or her card before it winds up as unclaimed property.


You can potentially save a lot of money by paying for a package of services upfront, but you also run the risk of losing that money if the company goes out of business.