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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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MIC-Info: RSA-MD5,RSA,
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<SEC-DOCUMENT>0001005477-03-001244.txt : 20030516
<SEC-HEADER>0001005477-03-001244.hdr.sgml : 20030516
<ACCEPTANCE-DATETIME>20030516142148
ACCESSION NUMBER:		0001005477-03-001244
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20030508
FILED AS OF DATE:		20030516

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			GERSTEL JEFFREY C
		CENTRAL INDEX KEY:			0001232799

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-19194
		FILM NUMBER:		03708154

	BUSINESS ADDRESS:	
		STREET 1:		C/O RAG SHOPS INC
		STREET 2:		111 WAGARAW ROAD
		CITY:			HAWTHORNE
		STATE:			NJ
		ZIP:			07506
		BUSINESS PHONE:		9734231303

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			RAG SHOPS INC
		CENTRAL INDEX KEY:			0000874385
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-HOBBY, TOY & GAME SHOPS [5945]
		IRS NUMBER:				510333503
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0831

	BUSINESS ADDRESS:	
		STREET 1:		111 WAGARAW RD
		CITY:			HAWTHORNE
		STATE:			NJ
		ZIP:			07506
		BUSINESS PHONE:		9734231303

	MAIL ADDRESS:	
		STREET 1:		111 WAGARAW RD
		CITY:			HAWTHORNE
		STATE:			NJ
		ZIP:			07506
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>edgar123.xml
<DESCRIPTION>FORM 4
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0101</schemaVersion>

<documentType>4</documentType>
    <periodOfReport>2003-05-08</periodOfReport>
    <notSubjectToSection16>0</notSubjectToSection16>
<issuer>        <issuerCik>0000874385</issuerCik>
        <issuerName>RAG SHOPS INC</issuerName>
<issuerTradingSymbol>RAGS</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
    <reportingOwnerId>
        <rptOwnerCik>0001232799</rptOwnerCik>
            <rptOwnerName>GERSTEL JEFFREY C</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>  </rptOwnerStreet1>
            <rptOwnerStreet2>  </rptOwnerStreet2>
            <rptOwnerCity>  </rptOwnerCity>
            <rptOwnerState>  </rptOwnerState>
            <rptOwnerZipCode>  </rptOwnerZipCode>
        </reportingOwnerAddress>
<reportingOwnerRelationship>
        <isDirector>1</isDirector>
        <isOfficer>1</isOfficer>
        <isTenPercentOwner>0</isTenPercentOwner>
        <isOther>0</isOther>
        <officerTitle>President</officerTitle>
    </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeSecurity>
        <securityTitle>
            <value>Common Stock Option</value>
            <footnoteId id="F1"/>
        </securityTitle>
        <conversionOrExercisePrice>
            <value>3.006</value>
        </conversionOrExercisePrice>
        <transactionDate>
            <value>2003-05-08</value>
        </transactionDate>
    <transactionCoding>
        <transactionFormType>4</transactionFormType>
        <transactionCode>A</transactionCode>
        <equitySwapInvolved>0</equitySwapInvolved>
    </transactionCoding>
        <transactionAmounts>
            <transactionShares>
                <value>63400</value>
            </transactionShares>
            <transactionValue>
                <value>3.006</value>
            </transactionValue>
            <transactionAcquiredDisposedCode>
                <value>A</value>
            </transactionAcquiredDisposedCode>
        </transactionAmounts>
        <exerciseDate>
            <value>2003-10-01</value>
            <footnoteId id="F2"/>
        </exerciseDate>
        <expirationDate>
            <value>2013-05-08</value>
        </expirationDate>
        <underlyingSecurity>
            <underlyingSecurityTitle>
                <value>Common Stock</value>
            </underlyingSecurityTitle>
            <underlyingSecurityShares>
                <value>63400</value>
            </underlyingSecurityShares>
        </underlyingSecurity>
        <postTransactionAmounts>
            <sharesOwnedFollowingTransaction>
                <value>63400</value>
            </sharesOwnedFollowingTransaction>
        </postTransactionAmounts>
        <ownershipNature>
            <directOrIndirectOwnership>
                <value>D</value>
            </directOrIndirectOwnership>
        </ownershipNature>
    </derivativeSecurity>

    <footnotes>
        <footnote id="F1">This option acquisition supersedes the previous option grant made by Rag Shops, Inc.</footnote>
        <footnote id="F2">These options to purchase up to 63,400 shares of Rag Shops, Inc. Common Stock were granted under the Rag Shops, Inc. 2002 Stock Option Plan and vest in four installments of 40% on October 1, 2003 and 20% on each of October 1, 2004, October 1, 2005 and October 1, 2006.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Jeffrey C. Gerstel</signatureName>
        <signatureDate>2003-05-16</signatureDate>
    </ownerSignature>

</ownershipDocument>

</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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