Toys ‘R’ Us is closing – and there’s bad news for gift card holders

Toys R Us

The just-announced Toys ‘R’ Us closure is terrible news for the 700 Australians who have now lost their jobs. Anyone holding a Toys ‘R’ Us gift card will also be dismayed to hear how administrators have chosen to honour these cards.

July 5 deadline, with strings attached

The team brought in to wind up this once-popular business have given shoppers a fortnight to use their gift cards – and they can only use them if they spend an extra specified amount in store when they make a purchase.

“Customers who have gift cards will be able to use them until July 5 — as long as they spend ‘an additional equivalent amount'”, administrators McGrathNicol told the ABC. “In other words, to utilise a $100 gift card in full, customers must spend at least an additional $100 in store.”

It seems like a rough deal for those gifted these cards, but perhaps it’s better than the cards not being accepted at all?

Liquidation is underway

The Australian Toys ‘R’ Us has continued to trade since entering voluntary administration back in May. With administrators failing to find a buyer for the 44 store chain, the stock will now be liquidated in store – at some drastic toy sales – over the coming weeks.

The administrator says customer lay-bys will be honoured “provided the outstanding balance is paid, and the stock is available” but must be finalised by July 5 as well – and there’s another consumer catch if the stock isn’t available …

“Deposits and lay-by payments cannot be refunded,” the Toys ‘R’ Us site explains. “Where customers have paid a deposit or lay-by payment and stock is not available, the Administrators have agreed to honour these payments in store on the basis that the total transaction is at least double the value of the deposit utilised in that transaction (i.e. to utilise a $100 lay-by deposit, the value of the transaction must be at least $200).”

The failure of the Australian chain follows the March collapse of the American Toys ‘R’ Us business. 885 US stores were set to close after it was revealed that the business was billions of dollars in debt. 


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Disingenuous?

On March 15, the Australian arm of Toys ‘R’ Us (perhaps disingenuously?) assured customers that it was business as usual here.

“The announcement regarding Toys ‘R’ Us US relates to their US operations. Toys ‘R’ Us Australia stores are open for business and continue to serve customers,” a spokesman said

“Our gift cards, VIP club points, lay-by, returns policy and other services remain unchanged.”

What if I’ve got a gift card or lay-by?

If you’re holding a gift card for this business, it might be worth teaming up with a kind toy-needing friend when you head in to spend it. They could make their purchase with you, making up the extra funds needed, so you’re not out of pocket funds you hadn’t intended on spending?

If you’ve got a layby at the chain, pop in ASAP to ensure you can access the item you’ve been making payments on. It sounds like they’re selling everythingincluding stock that may have been earmarked for your lay-by.

And while you’re sorting that out, don’t forget to spare a thought for the 700 people who have lost their jobs as a result of this chain’s collapse. Our thoughts are with them and their families.

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