What To Do With Unused Gift Cards When A Restaurant Closes For Good

We all have that pile of gift cards sitting neatly in a desk corner or tucked away in the glove compartment — and sometimes, that pile can remain untouched for months, even years. Out of sight, out of mind, right? And when you finally remember that you have them, it can be disappointing to find out that you can no longer use them because the restaurant shut down. While it's not something you think about when gifting or receiving, sudden closures can and do happen, especially if it's a local, small, or regional place. Inflation is a key reason why so many restaurants end up going bankrupt, but really there are a number of factors that can affect small and large enterprises alike. Independent spots rarely have a plan for honoring them after shutdown, leaving diners with nothing more than a reminder of their favorite meal.

This scenario isn't as rare as you might think. Experts find that almost half of all U.S. adults have at least one gift card they haven't fully spent, with an estimated $23 billion left unused nationwide (via CBS). And nearly $2 billion of that is tied up in the unspent Starbucks gift cards people are hanging onto. Most of the time, when a restaurant closes, that unspent balance disappears with it. Federal law states that gift cards must be valid for at least five years after purchase, and in some states, like New York, they're good for up to nine years. But those protections only apply if the business is still operating. The good news is that depending on how you bought the card — and a few actions you take — you might not have to write it off entirely.

If you've found that the restaurant is out of business, rendering your gift card unusable, there are still ways to keep that money from going down the drain. One of the first things to try is contacting the business or owner directly. You can check with City Hall or your regional Secretary of State's office to see if there's any contact information available to request a refund. It might be a long shot, but it's worth trying if you're hoping to get your money back. Your state's Consumer Protection Agency might also be able to help mediate or at least lodge a complaint with the closed business.

If that doesn't work — or seems like a hassle — reach out to your credit or debit card provider to ask whether they can reverse the charge. This may or may not work depending on their policy, but it's worth a try. If the restaurant filed for bankruptcy, you can also file a Proof of Claim with the U.S. Bankruptcy Court. That adds you as a creditor, meaning you're legally owed money from the company. While this doesn't guarantee repayment, you might receive something if another business buys their assets or brand, although some restaurant chains have survived bankruptcies and returned to the table.

The best way to avoid losing the value of your gift card in the first place, though, is simple: Use it before it's too late. It's easy to forget about them after birthdays or holidays, but using them right away — or within a few months — ensures they don't gather dust and that you actually get to enjoy the food and drinks they were meant for. 

Treat gift cards like cash and keep them in your wallet, not in a drawer. Waiting for the right time might mean missing the chance altogether — and with rising prices, that balance won't stretch as far later on. If you don't spend the entire amount, jot down what's left in a note or spreadsheet to stay on top of your remaining balances. The main lesson here? Use it or lose it. Those meals were meant to be enjoyed, not forgotten.

If you tend to lose track of physical gift cards, go digital. Major restaurants like Starbucks, Panera, and Chipotle let you add gift cards directly to their apps, so they're easier to track and harder to forget. You can also set calendar reminders or make a habit of using cards during slower months, when a free coffee or meal out feels like a reward. Whether it's a casual lunch or a night out, spend it soon — because a good meal is always better enjoyed now than never.