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Shoppers who purchased Synergy Restaurant Gift Cards at costco may be in for a costly surprise.
Synergy World, a loyalty and gift card company, abruptly shut down last month after filing for Chapter 7 bankruptcy protection. As a result, their gift cards are no longer redeemable, leaving some consumers with unusable balances with little immediate recourse.
Costco sold the cards, but did not issue them
Synergy gift cards were third party products. Although sold at Costco and redeemed at hundreds of participating restaurants nationwide, 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 December 2, 2025 in Chicago, Illinois. (Scott Olson/Getty Images)
Once Synergy closed, the cards became worthless, a critical distinction for consumers, experts say.
EDDIE BAUER BANKRUPTCY OPERATOR FILES, LIQUIDATION SALES BEGIN
As Bankrate analyst Ted Rossman said San Diego Union-Tribunea gift card “is basically a promise of future goods or services.”
Costco Member and Customer Service Desk, 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 often unsecured creditors and end up at the back of the line,” Rossman said.
Synergy initially said gift cards would be honored through early February, but later halted redemptions entirely, citing increased demand. The total amount of money tied up in unredeemed cards won’t be known until the bankruptcy filings are made public.
Additionally, some Costco locations have refunded Synergy gift cards while others have not. Costco did not respond to a request for comment from FOX Business.
Synergy initially said gift cards would be honored until early February, but later halted redemptions entirely. (Lindsey Nicholson/UCG/Universal Images Group)
The episode serves as a cautionary tale for shoppers who assumed buying gift cards at a trusted retailer offered extra protection. According to a 2024 report from Bankrate, 43% of Americans have unused gift cards, with an average balance of more than $240.
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Experts say consumers should understand who actually issues a gift card and use third-party cards sooner rather than later.
