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Defunct Sharper Image looks to redeem gift cards

The company has petitioned bankruptcy court to give cardholders back up to $2,245 in value, a new report says.

Dust off that Sharper Image gift card because in a few months, you just might be able to get some cash for it.

Sharper Image, which is now known as TSIC Inc., has petitioned the U.S. Bankruptcy Court in Delaware to allow it to pay back gift cardholders nearly three years after it shuttered its operation, The Wall Street Journal reported today. If its request is approved on its May 17 hearing date, TSIC plans to give cash back to any cardholder who has up to $2,245 in gift card value. It also plans to spend $60,000 to promote its payback program, the Journal reported.

Sharper Image filed for bankruptcy protection in 2008 and announced 96 store closures after the company's quirky, but sometimes useful, gadgets failed to appeal to consumers amid recession. By June of that year, its new owners--which acquired the firm for $49 million in a bankruptcy auction--announced that they would close the remaining 86 stores.

Prior to that closure, Sharper Image engaged in a battle with consumers over its gift cards. After filing for bankruptcy, the company declined to honor gift cards. A month later, it announced that customers could redeem the full value of gift cards, but only if they bought products worth twice the value of their credit. When the company finally closed its doors, the retailer recommended gift cardholders file a claim with the bankruptcy court.

Some other options did crop up for consumers. For example, Brookstone offered a 25 percent discount to anyone who presented a Sharper Image gift card in its stores at the time of purchase.

Those who held on to their gift card will need to furnish a photocopy to prove they have one on-hand. Customers who do not provide a photocopy but say they have an unredeemed gift card will receive a refund only if enough cash is available.

Today, Sharper Image lives on in name only. A company named Camelot Ventures Group operates under the licensed Sharper Image name. It sells many of the wacky gadgets the original store once carried.