Bankrupt retailers stick you with worthless gift cards

I first got interested in the issue of companies deciding not to honor gift cards following bankruptcy filings when Bradlees tried to pull that nonsense back in 2000. The company reversed that decision after universal consumer outrage but at the time a spokesman for Eliot Spitzer's office said the company was within its rights:"Everything goes to the bankruptcy court, and there's a process in place for consumers to file a claim."

Now consumers with Sharper Image gift cards are in a similar situation after the company announced that it was suspending the acceptance of gift cards but reassured consumers that "We appreciate your understanding..." I'm sure plenty of customers were less than understanding.

I don't understand the logic behind this. Companies are not allowed to report a profit on the sale of a gift card until the it redeemed for merchandise. I would argue that the gift card money should be held in escrow for the consumers until the sale is made.

Gift cards are a great deal for businesses -- they give the company cash to use/earn interest on before they have to provide anything of value in return. Consumers shouldn't get the shaft when the company files for bankruptcy; they should get their money back before anyone else gets anything.