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Bed Bath & Beyond gift cards to expire weeks before company closes its Canadian stores

Bed Bath & Beyond is set to close its Canadian stores sometime in April, following liquidation sales, but customer gift cards are set to expire on March 9.

Gift cards typically don't expire, but rule changes when bankruptcy protection sought

A white sign for Bed Bath & Beyond is pictured on a store front.

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 use her $50 gift card before it was too late.

"It was not what I really wanted," she said. "I was disappointed and I was 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 company told CBC News its Canadian stores are set to close sometime next month, but customer gift cards and Welcome Rewards points will expire next week — on March 9.

Ann Hull of Barrie, Ont. holds up an ice cream scooper and paper towel holder she bought with her $50 Bed Bath & Beyond gift card.

Hull said she thinks the March 9 deadline is unfair.

"There's going to be a lot of disappointed people," she said. "I think they should be honouring the gift cards right until their doors close."

Can gift cards expire?

Typically, gift cards can't expire in Canada as mandated by provincial consumer protection regulations. But that rule no longer applies when a company seeks bankruptcy protection — leaving the courts to determine whether, and for how long, a retailer's gift cards will be accepted.

"Generally, the judge will accept the company's recommendation, but it is ultimately the judge who needs to approve it," said insolvency lawyer Geoffrey Dabbs.

Bed Bath & Beyond did not answer questions about the March 9 deadline, except to say that it had been extended following an initial expiry date of Feb. 25.

A Bed Bath & Beyond gift card

Dabbs said gift cardholders are fortunate they have a window of opportunity to redeem their cards, as they join a long list of unsecured creditors owed money by Bed Bath & Beyond Canada.

"The unsecured creditors on the bottom typically get little or nothing,"said Dabbs, a partner with Gehlen Dabbs Cash LLP in Vancouver.

He also said the early gift card expiry date is a prudent move.

"They need to have a deadline so they can then say, 'OK, there are no more obligations there. Now we've covered off that liability, we can move on to dealing with the rest.'"

Bed Bath & Beyond Canada had a net loss of $99.5 million for the nine-month period ending Nov. 26, 2022, according to court documents.

In an effort to reorganize its finances in the United States, the cash-strapped retailer said it's already in the process of closing 360 Bed Bath & Beyond stores and about 120 buybuy BABY stores in the country.

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Bed Bath & Beyond isn't 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 company said Nordstrom's Canadian business, which launched in 2014, has lost money every single year it has been in operation.

Spokesperson Joel Shaffer said the retailer's gift cards will continue to be honoured through to the end of liquidation sales, estimated to run until late June.

Dabbs said the company's gift card plan will still have 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 was quite surprised by it," she said. "I think that they need to be more transparent about their policies."

Bed Bath & Beyond did not answer questions about how it's getting the word out to gift cardholders.

According to the Better Business Bureau, cardholders who miss the deadline can file a claim for the card's value. However, they may never get their cash, since secured creditors, such as big banks, get first dibs.

Credit belongs to : www.cbc.ca

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