Got an Annie’s Annuals gift card? You’ll have to get in line to recoup your money

“What about my Annie’s gift card?” is among many lingering questions customers of the popular garden store are asking in the aftermath of its recent sudden closure, given that the whimsically decorated tokens won’t be honored by the business.

Based on comments posted on Richmondside and social media sites, numerous angry customers are pondering if they have any recourse, with some of the cards having been purchased for hundreds of dollars.

While Annie’s gift cards and store credit cannot be redeemed, gift card holders can file a claim with the estate, according to B. Riley, the liquidator working to wind down the nursery. The same goes for customers with pending orders or those wishing to make a return or any other entity owed money. The deadline to file a claim is March 31, 2025.

It’s estimated that the business had several hundred thousand dollars in not-yet-redeemed gift cards at closing, said a former employee who asked not be named, fearing repercussions from the owner. 

Employees and customers feel hoodwinked. Several former Annie’s employees have told Richmondside they learned the store was closing only one day or less beforehand.

Gift cards technically hold their value even if business closes

Whether a business that has closed has to honor gift cards may be a legal gray area, based on information from numerous consumer groups and agencies contacted by Richmondside. 

“Unfortunately, to my knowledge there is currently no bright-line test that establishes the loss of gift card value in this situation to be clearly illegal,” said Chuck Bell, advocacy manager for Consumer Reports. 

“To not give customers a heads-up when you know the store will be closing is extremely disappointing and unfair,” Bell continued.

Under state law, a gift card is considered cash belonging to the card owner and holds value even if the business that sold it closes. This includes if a business declares bankruptcy. 

But when a business goes bust financially, it often leaves a long line of people or other businesses owed money, such as suppliers, employees and accountants. 

So, put simply: Gift card holders: Get in line.

Determining who gets made whole, or which creditors the debtor business pays often is dependent upon the failed company’s assets and the courts. A business’s sense of loyalty to its customers can also play a role.

“Struggling businesses sometimes favor particular creditor interests over others when they are short on revenue,” Bell said. “Usually there may be many parties who are harmed in a business failure, including landlords, suppliers, utility companies and workers.” 

He went on: “As a consumer advocate, I think it’s terrible consumers were left with gift cards they may not be able to redeem in this situation. Any business that is facing closure has a choice to protect its customers, and if they are acting in an ethical way, they should give them a fair chance to redeem the gift cards.”

California civil code “protects” gift cards, meaning it provides some rights to card purchases and holders.

When asked about the Annie’s situation, the office of Attorney General Rob Bonta said: 

“While we are unable to provide legal advice or analysis, in general, California law protects gift certificates, including those in gift card form. Money paid for a gift certificate belongs to you, not the business. (Civ. Code, § 1749.6, subd. (a).) A business must continue to honor your gift certificates, even if it files bankruptcy. (Civ. Code, § 1749.6, subd. (b).)”

But enforcing civil laws often takes legal representation or advice.

Annie’s brought on a liquidator, B. Riley Retail Solutions, a company that says it helps “clients liquidate and realize immediate returns from excess inventories and underperforming assets,” according to its website. 

A spokesperson for B. Riley, said the company has instigated an Assignment for the Benefit of Creditors (ABC), an alternative to bankruptcy that is less costly and provides a faster and more flexible liquidation process. In doing so, all business assets are essentially turned over to B. Riley to dispose of.

The company’s debts and obligations will be paid off in an organized way, following a priority order determined by law. Claims filed, including those by gift card holders, are evaluated against the estate, and payments are made based on the available assets and the priority of each claim.

So what do I do with my Annie’s gift card?

Besides filing a legal claim with the liquidator, anyone who purchased a gift card with a credit or debit card should contact their issuing bank as soon as possible to try to reverse or stop the charge. Customers can also file a complaint using the state attorney general’s online business compliant form.

Richmondside reached out to the Federal Trade Commission (FTC), which enforces laws around false advertising and consumer fraud, to see if someone that sells gift cards while knowing the business is going to be closed constitutes any illegalities.

In a note former owner Sarah Hundley posted on the store’s website, she alludes to knowing that there trouble was brewing, writing: “Over the past few months, I have faced serious and unexpected health challenges. Throughout this difficult time, I’ve worked tirelessly to explore every possible way to keep the nursery going. Sadly, despite my best efforts, the challenges — both personal and business-related — escalated much faster than I ever anticipated, and I could no longer maintain business operations.”

Hundley has not made herself available for an interview with Richmondside, saying in an email last week that she was having surgery.

Ted Mayfield, an FCC spokesperson, said the agency doesn’t comment on specific businesses or cases.

The federal Consumer Financial Protection Bureau, which enforces federal consumer law, also declined to comment, citing the same policy. But the bureau’s website has details on its federal gift card requirements. 

A spokesperson for the California Department of Consumer Affairs, which issues and regulates a variety of business and service licenses, said it doesn’t have jurisdiction over gift cards. 

But its website has a detailed gift card FAQs page, which includes a section on bankruptcy. The information, written in 2010, may be outdated, said a spokesperson from the department.