As Toys R Us prepares to close its doors for good, many customers are scrambling to return unused gift cards.
The retail chain declared bankruptcy last September but continued to operate through the holiday season,thanks to debtor-in-possession financing. Despite the $3.1 billion loan, Toys R Us is running out of money and will close down 800 stores nationwide. Three outlets are located in in Western New York.
In a recent release, U.S. Senator Charles Schumer pressured the retail giant to reimburse customers who purchased gift cards.
“I am urging Toys R Us to give cash back, dollar-for-dollar, for the gift cards that people bought during this holiday season,” said the New York Democrat. “Otherwise, the gift cards will be as worthless as a lump of coal in your stocking.”
Under the Credit Card Act of 2009, retailers must honor gift cards for at least five years after purchase. But Toys R Us won’t be around much longer and Schumer warned that gift card holders are at risk.
“Lots of people didn’t spend the money, and all of the sudden Toys R Us is going bankrupt, and the music is about to stop for them. But it’s leaving hundreds of thousands who bought the gift cards from Toys R Us in the lurch.”
Schumer added that refunding customers should be the retailer’s top priority.
“It’s really unfair of Toys R Us to put bond holders who invested in a risk ahead of their own consumers who showed faith in them and bought the gift cards, and believed that they would be able to redeem them for a toy for their kid,”
Toys R Us announced it will honor gift cards for the next 30 days. Those who seek to use the cards beyond a month could be denied.