These Gift Cards WORTHLESS — Customers Devastated

Hand showing thumbs down gesture, dark background. — CUSTOMERS DEVASTATED

A trusted retailer just sold thousands of gift cards to customers that became worthless overnight, exposing a dangerous loophole in how third-party products are sold to unsuspecting Americans.

Story Snapshot

Synergy World filed Chapter 7 bankruptcy, rendering all gift cards sold at Costco completely worthless with minimal warning to consumers
The company discounted cards 50% in the final months before bankruptcy, raising serious ethical concerns about predatory practices
Gift card holders are classified as unsecured creditors, placing them last in line for any potential recovery
Costco is processing refunds at some locations, though policies remain inconsistent across stores

Bankruptcy Leaves Consumers Holding Worthless Paper

Synergy World, a San Diego-based third-party gift card company operating since 1995, filed for Chapter 7 bankruptcy protection and abruptly ceased operations with only days of notice to consumers. The company announced on its website that all Synergy restaurant gift cards would become non-redeemable after January 31, 2026.

Thousands of Americans who purchased these cards at Costco now hold worthless plastic, despite buying them from one of the nation’s most trusted retailers. This scenario perfectly illustrates how middlemen can exploit consumer trust while leaving everyday Americans to absorb the financial loss.

Some gift cards sold at Costco are now worthless https://t.co/SimQytX0xz

— FOX Business (@FoxBusiness) February 10, 2026

Questionable Discounting Before Collapse Raises Red Flags

In the months preceding its bankruptcy announcement, Synergy heavily discounted gift cards by approximately 50 percent, a move that many consumers now view as predatory and potentially fraudulent. The company collected money from unsuspecting customers while likely knowing financial collapse was imminent. This practice should raise alarm bells for anyone concerned about corporate accountability and consumer protection.

Online commenters expressed outrage, with some suggesting such behavior “should be illegal.” The situation demonstrates how ordinary Americans get burned when companies prioritize profit over integrity, taking advantage of trusting consumers right up until the moment they shut their doors.

Gift Card Holders Face Grim Recovery Prospects

Ted Rossman, a Bankrate analyst, explained that gift card holders are “typically unsecured creditors and end up near the back of the line” during bankruptcy proceedings. This legal classification means consumers who purchased Synergy cards will likely recover little to nothing from the bankruptcy process.

The company operated a multi-restaurant network spanning California, Texas, Florida, Colorado, and Arizona, affecting independent restaurants that now refuse to honor the cards due to reimbursement uncertainty. According to a 2024 Bankrate report, 43 percent of Americans hold unused gift cards with average balances exceeding 240 dollars, highlighting widespread vulnerability to this type of corporate failure.

Costco Offers Limited Relief Amid Confusion

Costco has begun processing refunds for unused Synergy gift cards at multiple locations, though the retail giant declined to comment publicly on the situation through FOX Business. Refund policies vary inconsistently across stores, leaving some customers with refunds while others are denied. This inconsistency creates confusion and frustration for consumers who trusted Costco’s reputation when purchasing the cards.

While Costco wasn’t the card issuer, the company’s willingness to offer some refunds demonstrates corporate leverage that could provide relief if applied uniformly. The situation exposes a critical gap in consumer education: Americans must understand who actually issues third-party products, not just where they’re sold.

Some gift cards sold at Costco are now worthless

Synergy gift cards were issued and managed by the company, not Costcohttps://t.co/PiNh1zKRGp

— The Big Bad Conservative Wolf (@RightWingNest) February 10, 2026

This debacle serves as a stark reminder that consumers must exercise heightened caution with third-party gift cards, even when sold at reputable retailers. The minimal notice period and questionable pre-bankruptcy discounting tactics demonstrate how companies can exploit legal loopholes at the expense of hardworking Americans.

Experts recommend using third-party gift cards immediately rather than holding them long-term, advice that proves prescient given Synergy’s rapid collapse. The broader implications may prompt regulatory scrutiny of gift card industry practices, though such government intervention often arrives too late to help those already victimized by corporate misconduct.