BBB Gives Tips on Using Gift Cards Following The Announced Closing of Toys ‘R’ Us
Sunday, March 18, 2018
GoLocalWorcester Business Team
Following the announcement that Toys R Us is closing its stores across the country, the Better Business Bureau (BBB) is advice for those with gift cards.
Toy R Us announced that they were closing all stores earlier this week.
“When you buy a gift card, you are essentially giving the company a loan until you redeem the value. When a store files for bankruptcy, payments are frozen and creditors must file claims in order to get paid. Gift card holders will, unfortunately, find themselves out of luck or with limited options. This isn’t even up to the business. The court decides whether – and for how long – to accept gift cards.
If you miss the deadline to redeem a gift card, you are able to file a claim for the value of the card. However, these claims are processed behind the company’s major creditors. So if you see news about a company preparing to file for bankruptcy, use your gift cards immediately,” said the BBB.
BBB Tips: Gift Cards and Bankruptcy
Avoid issues with your gift cards by following these tips:
- Before buying a gift card, look into the retailer’s financial condition: If news articles report that a company is on shaky ground, it might be best to purchase a gift card from another retailer.
- Check the terms and conditions. A gift card’s terms may allow the card to be used at another business location.
- Purchase gift cards with a credit card, if possible: Your credit card company may be able to help recover money lost if a business goes under. Some retailers, however, require gift cards to be purchased with cash.
- Use gift cards as quickly as possible: While you may have years – or forever – to use the gift card, that doesn’t mean you should wait that long to spend it.