(Update) Red Lobster Has Filed Bankruptcy; What It Means For Red Lobster Gift Cards

Update 5/20/24: Red Lobster has officially filed for Chapter 11 bankruptcy. They’re planning on keeping their restaurants open (well, those that they haven’t already permanently closed), but I’d still recommend redeeming or reselling any Red Lobster gift cards you have ASAP.

Update 5/14/24: Red Lobster has abruptly closed ~50 of their ~650 restaurants and is liquidating all the equipment, furnishings, etc. It might just be that those were the worst-performing locations and that the remaining locations are more viable. However, if you have Red Lobster gift cards for personal use it’d be worth redeeming them ASAP because your local restaurant could close overnight with no notice.

News outlets are reporting that Red Lobster is considering filing for Chapter 11 bankruptcy. While they claim that a decision hasn’t been made on restructuring yet, whenever these bankruptcy reports come out for retailers and restaurants, within a week they’ve usually filed for bankruptcy and so I wouldn’t be surprised if that’s what happens here too.

Red Lobster gift cards go on sale intermittently, plus many readers no doubt have gift cards they’ve been given as gifts and never gotten around to redeeming. As things stand, there’s not necessarily any need to rush out to your nearest Red Lobster because even if they do file for bankruptcy, they’ll almost certainly continue accepting their gift cards as a payment method.

The bigger risk for now is likely going to be whether your local Red Lobster remains open. With the company weighed down by debt and many of their restaurants having expensive leases, they might decide to abruptly close some of the worst-performing restaurants. If that happens, your Red Lobster gift card would still be valid as there’d still be many of their restaurants it could be redeemed at; it’d just make it harder for you to redeem personally.

So while there’s no immediate risk of your gift cards being rendered valueless, it might be prudent to redeem and/or resell them sooner rather than later just in case filing for bankruptcy doesn’t end up being the panacea they’re looking for and Red Lobster becomes Dead Lobster.