Can the new owner of a retail brand renege on a promise of never expiring gift cards?
Aug 7, 2024, 12:02 PM | Updated: 12:07 pm
SALT LAKE CITY — Bed Bath and Beyond appears to be back from bankruptcy. You might have already received numerous emails from the retailer touting deals for rugs, towels, grills – any number of home goods.
Cindy Soderstrom paid $250 for several gift cards she bought from Bed Bath and Beyond a little over five years ago.
“Right up here it says, ‘Never a fee. Never expires,’” she said as she pointed out that verbiage on the back of each of those cards.
“Right after that, my mother became ill,” she explained as to why she couldn’t use those cards immediately.
Caring for her mom took her to a small town in Wyoming that had few stores of any kind. Not one of those was a big box store like Bed Bath and Beyond.
Bed Bath and Beyond touted their gift cards as never expiring but they’ve ceased accepting them. (Josh Szymanik, KSL TV)
But no worries, Soderstrom thought, because of the “never expires” guarantee printed on her cards. But now back in Utah, the retailer is refusing to accept her cards.
“They said, ‘No, thank you very much. Have a nice day,’” she said. “Never means it’s not going to stop. This should be good.”
Frustrated, she contacted the KSL Investigators.
According to its news releases, The Bed Bath and Beyond brand is not only back, it’s now Utah based. Utah retailer Overstock bought it and rolled it into a company simply called Beyond, Inc. I reached out to Beyond multiple times about Soderstrom’s experience but did not get a response. Though on its website, Beyond states, “We are not able to honor gift cards that were issued and unused. Gift card balances from preexisting digital and physical gift cards expired under previous Bed Bath & Beyond ownership.”
But can they just not honor gift cards with the explicit promise of never expiring? In a word, yes.
Beyond, Inc. only bought Bed Bath and Beyond’s intellectual property – i.e. its brand and name – but it did not take on any of the company’s debt. When Bed Bath and Beyond went bankrupt, it ceased to exist. So, Soderstrom and anyone else holding onto their unused gift cards, in legal terms, became an “unsecured creditor.”
“Which means they would likely not get paid unless the business liquidated at such an amount that there were extra funds to pay them,” explained bankruptcy attorney Reed Allmand, who says he believes unsecured creditors don’t have any legal recourse for their unusable gift cards.
“There may be some non-legal recourse, like taking it to another vendor and seeing if they’ll honor it,” Allmand suggested.
Bed Bath and Beyond’s intellectual property was bought by Utah-based, Overstock, which did not buy the defunct chain’s debt. (Josh Szymanik, KSL TV)
For Cindy Soderstrom, it’s a $250 lesson learned. “Never” doesn’t always mean “never.”
“Oh, I will definitely be leery now,” she said. “It’s my hard-earned money and the words, ‘Never Expires’ meant something to me.”
Other options besides taking the unusable card to a competitor: If your purchase of a gift card to a now defunct store was recent and you used your credit card to pay for it — contact your credit card company to see if they’ll refund you. Also, if you bought the gift card from a third-party seller, contact them to see if they’ll let you exchange it for a card to a different store. If all else fails, consider holding onto to the card even though it’s technically worthless. It doesn’t happen often, but some retailers emerge bankruptcy willing to accept old gift cards.
