Got a TGI Fridays gift card? It might be smart to use it soon

Nov 07, 2024

When TGI Friday’s declared bankruptcy, there were still nearly $50 million in TGI Fridays gift cards in circulation that had not been used. If you have one in your wallet, it might be a good idea to use it quickly.

In bankruptcy, a company has some protection from creditors, and if you have a gift card, technically you’re a creditor – the company owes you money.

The $50 million in gift cards may be a bigger problem for TGI Fridays franchises. The franchises are not included in the bankruptcy, just the 39 company-owned stores.

Under normal circumstances, when customers pay for meals at franchise restaurants using gift cards, the company reimburses the franchise. Now, it’s not clear if the reimbursements will continue.

According to court documents, some of the unused TGI Fridays gift cards are more than 20 years old. Some of those might have been misplaced and will never be used. Franchisees can only hope.

But the possibility that 122 franchise restaurants could be on the hook for nearly $50 million in ”free” meals could be a harsh blow to an industry that is already facing economic headwinds. Isaac Marcushamer, co-founder and partner at South-Florida based DGIM Law, says chains like TGI Friday’s face a mix of economic challenges and changing consumer behavior.

“During the pandemic, many restaurants relied on government relief programs to survive,” Marcushamer told ConsumerAffairs. “Now, rising inflation, higher food and labor costs, and lease adjustments back to pre-pandemic rates have compounded the strain on already tight margins.

“Additionally, consumer preferences have shifted toward delivery and takeout, reducing in-person dining revenue. An uncertain economy, increased interest rates and lease adjustments create the perfect storm for many restaurants to fall into bankruptcy. Several of the same drivers are also being felt by smaller restaurants. This is industry-wide."

According to court records, TGI Friday’s franchises likely will be required to honor company gift cards, regardless of whether they will be reimbursed. Still, it may be smart to use a gift card as soon as possible.

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Mark Huffman has been a consumer news reporter for ConsumerAffairs since 2004. He covers real estate, gas prices and the economy and has reported extensively on negative-option sales. He was previously an Associated Press reporter and editor in Washington, D.C., a correspondent for Westwoood One Radio Networks and Marketwatch.

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