In case you need another reason to convince you that gift cards suck, check this out… Sharper Image filed bankruptcy on February 19, 2008 and promptly stopped honoring their own gift cards. This was actually a byproduct of the bankruptcy proceedings, but they initially told the court that they wouldn’t seek an exception to allow them to honor the $42.6 million in outstanding cards.
Sharper Image eventually changed their tune, however, when Brookstone (another mall specialty store) took advantage of the situation by offering cardholders a 25% discount on their entire Brookstone purchase in exchange for their card. They ultimately got permission from the court to resume honoring their gift cards but, as things currently stand, you have to make a purchase that is at least twice the value of your gift card.
Full details on gift card redemption can be found here.