When Ann Hull of Barrie, Ont., visited her local Bed Bath & Beyond store last week, she bought an ice cream scooper and a paper towel holder, determined to make use of her $50 gift card before it was too late.
“It was not what I actually wanted,” she said. “I used to be dissatisfied and I used to be definitely frustrated.”
The U.S.-based Bed Bath & Beyond retail chain is in financial trouble, so it’s closing all of its 54 Bed Bath & Beyond stores and 11 buybuy BABY locations in Canada.
Last month, Bed Bath & Beyond Canada was granted bankruptcy protection by the Ontario Superior Court of Justice.
The corporate told CBC News its Canadian stores are set to shut sometime next month, but customer gift cards and Welcome Rewards points will expire next week — on March 9.
Hull said she thinks the March 9 deadline is unfair.
“There’s going to be quite a lot of dissatisfied people,” she said. “I believe they needs to be honouring the gift cards right until their doors close.”
Can gift cards expire?
Typically, gift cards cannot expire in Canada as mandated by provincial consumer protection regulations. But that rule now not applies when an organization seeks bankruptcy protection — leaving the courts to find out whether, and for a way long, a retailer’s gift cards shall be accepted.
“Generally, the judge will accept the corporate’s advice, nevertheless it is ultimately the judge who must approve it,” said insolvency lawyer Geoffrey Dabbs.
Bed Bath & Beyond didn’t answer questions on the March 9 deadline, except to say that it had been prolonged following an initial expiry date of Feb. 25.
Dabbs said gift cardholders are fortunate they’ve a window of opportunity to redeem their cards, as they join an extended list of unsecured creditors owed money by Bed Bath & Beyond Canada.
“The unsecured creditors on the underside typically get little or nothing,” said Dabbs, a partner with Gehlen Dabbs Money LLP in Vancouver.
He also said the early gift card expiry date is a prudent move.
“They should have a deadline so that they can then say, ‘OK, there are not any more obligations there. Now we have covered off that liability, we are able to move on to coping with the remaining.'”
Bed Bath & Beyond Canada had a net lack of $99.5 million for the nine-month period ending Nov. 26, 2022, based on court documents.
In an effort to reorganize its funds in america, the cash-strapped retailer said it’s already within the technique of closing 360 Bed Bath & Beyond stores and about 120 buybuy BABY stores within the country.
Bed Bath & Beyond is not the only U.S. retailer in trouble. On Thursday, luxury department store chain Nordstrom announced it intends to wind down its 13 Nordstrom and Nordstrom Rack stores in Canada.
In court filings, the corporate said Nordstrom’s Canadian business, which launched in 2014, has lost money each yr it has been in operation.
Spokesperson Joel Shaffer said the retailer’s gift cards will proceed to be honoured through to the tip of liquidation sales, estimated to run until late June.
Dabbs said the corporate’s gift card plan will still need to be approved in court.
Getting the word out
Customer Ann Hull said she only learned about Bed Bath & Beyond’s looming gift card deadline from a cashier at its Barrie location.
“I used to be quite surprised by it,” she said. “I believe that they should be more transparent about their policies.”
Bed Bath & Beyond didn’t answer questions on the way it’s getting the word out to gift cardholders.
In keeping with the Higher Business Bureau, cardholders who miss the deadline can file a claim for the cardboard’s value. Nevertheless, they could never get their money, since secured creditors, comparable to big banks, get first dibs.