Understanding the Decline in Value of Certain Costco Gift Cards
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Shoppers who purchased Synergy restaurant gift cards at Costco may face an unexpected financial setback.
Synergy World, a company specializing in gift and loyalty cards, abruptly ceased operations last month after filing for Chapter 7 bankruptcy protection. Consequently, its gift cards can no longer be redeemed, leaving consumers with unusable balances and limited options for recourse.
Costco sold the cards – but didn’t issue them
It’s important to note that Synergy’s gift cards were third-party products. Although they were sold at Costco and could be redeemed at hundreds of participating restaurants across the country, the cards were issued and managed by Synergy, not Costco or the restaurants themselves.
Customers walk in the parking lot outside a Costco store on Dec. 2, 2025, in Chicago, Illinois. (Scott Olson/Getty Images)
Once Synergy shut down, the cards effectively became worthless—a critical distinction for consumers, according to experts.
EDDIE BAUER RETAIL OPERATOR FILES FOR BANKRUPTCY, BEGINS LIQUIDATION SALES
As Bankrate analyst Ted Rossman explained to the San Diego Union-Tribune, a gift card “is basically a promise for future goods or services.”
Costco membership and customer service counter, Costco, Florida. The company outlined its changes to improve the customer shopping experience during an earnings call last month. (Lindsey Nicholson/UCG/Universal Images Group via Getty Images)
“When the company behind that promise fails, gift card holders are typically unsecured creditors and end up near the back of the line,” Rossman noted.
Initially, Synergy stated that gift cards would be honored through early February, but later halted redemptions entirely, citing a surge in demand. The total amount of money tied up in unredeemed cards will only be revealed once bankruptcy filings are made public.
Adding to the confusion, reports indicate that some Costco locations have refunded Synergy gift cards while others have not. Costco has yet to respond to a request for comment from FOX Business.
Synergy initially said gift cards would be honored through early February, but later halted redemptions altogether. (Lindsey Nicholson/UCG/Universal Images Group)
This situation serves as a cautionary tale for shoppers who believed that purchasing gift cards from a reputable retailer provided additional security. According to a 2024 report from Bankrate, 43% of Americans hold unused gift cards, with an average balance exceeding $240.
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Experts advise consumers to be aware of who actually issues a gift card and to use third-party cards sooner rather than later.
The ‘Barron’s Roundtable’ panel discusses big-box retailers beating competition on value, their innovation, and revenue models.
Shoppers who purchased Synergy restaurant gift cards at Costco may face an unexpected financial setback.
Synergy World, a company specializing in gift and loyalty cards, abruptly ceased operations last month after filing for Chapter 7 bankruptcy protection. Consequently, its gift cards can no longer be redeemed, leaving consumers with unusable balances and limited options for recourse.
Costco sold the cards – but didn’t issue them
It’s important to note that Synergy’s gift cards were third-party products. Although they were sold at Costco and could be redeemed at hundreds of participating restaurants across the country, the cards were issued and managed by Synergy, not Costco or the restaurants themselves.
Customers walk in the parking lot outside a Costco store on Dec. 2, 2025, in Chicago, Illinois. (Scott Olson/Getty Images)
Once Synergy shut down, the cards effectively became worthless—a critical distinction for consumers, according to experts.
EDDIE BAUER RETAIL OPERATOR FILES FOR BANKRUPTCY, BEGINS LIQUIDATION SALES
As Bankrate analyst Ted Rossman explained to the San Diego Union-Tribune, a gift card “is basically a promise for future goods or services.”
Costco membership and customer service counter, Costco, Florida. The company outlined its changes to improve the customer shopping experience during an earnings call last month. (Lindsey Nicholson/UCG/Universal Images Group via Getty Images)
“When the company behind that promise fails, gift card holders are typically unsecured creditors and end up near the back of the line,” Rossman noted.
Initially, Synergy stated that gift cards would be honored through early February, but later halted redemptions entirely, citing a surge in demand. The total amount of money tied up in unredeemed cards will only be revealed once bankruptcy filings are made public.
Adding to the confusion, reports indicate that some Costco locations have refunded Synergy gift cards while others have not. Costco has yet to respond to a request for comment from FOX Business.
Synergy initially said gift cards would be honored through early February, but later halted redemptions altogether. (Lindsey Nicholson/UCG/Universal Images Group)
This situation serves as a cautionary tale for shoppers who believed that purchasing gift cards from a reputable retailer provided additional security. According to a 2024 report from Bankrate, 43% of Americans hold unused gift cards, with an average balance exceeding $240.
CLICK HERE TO GET FOX BUSINESS ON THE GO
Experts advise consumers to be aware of who actually issues a gift card and to use third-party cards sooner rather than later.
