Is your favorite retail store closing? Do you buy gift cards during the holidays? Store closings are on the rise and if you buy gift cards from a retail store that is closing, you and your gift card recipient will be out of luck. The increasing number of large retail store closings and stores going out of business in 2008/2009 are causing many shoppers to think twice before buying gift cards.
You’ve probably heard the news about Circuit City closing some stores, but I for one am not shedding any tears about Circuit City. Circuit City (amongst several other large retail stores) have the worst customer service I’ve ever seen, so it’s no big loss to see Circuit City going Bye-Bye. Goodbye Circuit City and Good Riddance.
Consumer Reports recommends that consumers NOT buy gift cards at all this year, saying if the business goes under or files for bankruptcy, the gift card won’t be any good and the money spent will a complete loss. Wait a minute, what about “open loop” gift cards?
Consumers are being advised to pay close attention to the list of retail stores closing before buying gift cards (or discount gift cards) as holiday gifts, being sure to regularly check for updates to the list of stores closing their doors.
[Update: If you have received an email or heard about an email listing stores that are purported to be closing their doors, pay close attention to the links below because part of the listed stores below include information about the “email hoax”]
List of Retail Stores Closing-
Circuit City filed Chapter 11 bankruptcy on November 11, 2008 announcing some 155 stores are being closed
117 under performing Ann Taylor stores closing nationwide
Lane Bryant, Fashion Bug and Catherine’s - Parent company Charming Shoppes Inc. announced several months ago the closing of 150 stores nationwide
Eddie Bauer closed 31 retail stores and outlets (low performing stores) but opened 10 new stores during the first three quarters of this year, and are not planning on closing anymore store locations in 2009. (Link provided details financial report for Eddie Bauer)
Cache plans to close 21 stores and open 16 new stores in 2008
Talbots “closing all stores” refuted. Talbot closed down 100 stores but remains in business
J. Jill- Talbot wants to sell the chain of stores but has not made an announcement of store closings
GAP (including Gap, Banana Republic and Old Navy) increased its store closures from 85 to approximately 115 store locations
Footlocker closing 140 stores in 2008. So far, 129 Footlocker stores have closed and 58 new Footlocker stores have opened
Wickes Furniture filed for bankruptcy early this year and all retail store locations are closed
Levitz Furniture filed for bankruptcy in 2007 and currently in process of liquidating assets
The Bombay Co. filed for bankruptcy in 2007 and is closing all stores in the U.S.
Zales announced in February 2008 the closing of 105 Zales stores this year
Whitehall Jewelers filed for bankruptcy in June 2008 and is closing all stores
Only some Piercing Pagoda (owned by Zales) store locations are included amongst the 105 planned closures announced by Zales in February
Disney announced in May 2008 the closing of 98 stores and Home Depot is closing 15 stores nationwide. [Update: See Comments Below]
Macys closed 9 department stores in 2008
Linens ‘n Things filed for bankruptcy in May 2008 and is closing all stores
Movie Gallery (AKA Hollywood Video) closed hundred of stores after filing for bankruptcy in 2007 but remains in business
Pep Boys closed 33 store locations, about 5% of its auto supply and repair stores [Update: See Comments Below]
Sprint Nextel announced in January 2008 the closing of 125 stores
JC Penney, Lowe’s and Office Depot are “scaling back”
Ethan Allen announced in January 2008 plans to consolidate “about 12 of its retail design centers and two service centers”
Wilson Leather has already closed down 160 store locations and is converting the remaining stores into a new women’s accessories concept
Sharper Image and Lillian Vernon filed for bankruptcy in early 2008 and is closing all stores
K B Toys posted a list of 356 stores that it is closing around the U.S. as part of its bankruptcy reorganization plan. To see the list of store closings, go to the KB Toys Information web site, and click on Press Information [Update: Closings denied]
Dillard’s new CEO focusing on closing underperforming stores and cut back on expenses
The Best Gift Cards are “Open Loop” Gift Cards
The suggestion that consumers give cash this year instead of gift cards or Gift Certificates doesn’t sit too well with some shoppers who feel that sticking a couple of twenties in an envelope feels rather cold and impersonal. “79% of consumers have given a gift card for Christmas within the past five years”, says Britt Beemer, chairman of America’s Research Group, a consumer-behavior research company. Industry experts say gift cards should be very thoughtfully selected, agreeing that the best gift cards are “open loop” gift cards.
Open loop gift cards that are tied to a bank rather than a specific retail store are believed to be the best gift cards for any and all occasion gifts. It doesn’t matter if your favorite retail store closes or goes belly up in bankruptcy, because open loop gift cards can be used anywhere and at any time, eliminating the need to constantly gauge the financial health of a specific retail store.
Mastercard gift cards or visa gift cards are the most popular open loop gift cards, as well as gift cards from American Express and Discover. Most mall operators also offer gift cards that can be used in all of their stores. If you receive gift cards this holiday season, “don’t let them gather dust”, says Ellen Cannon of Bankrate.com. “Spend them by New Year’s.”
Popularity: 15% [?]
25 responses so far ↓
1 Success with Todd (1 comments.) // Nov 22, 2008 at 6:48 am
Hi Lin,
You know, this might not be such a bad thing …
Goes right along with our hurried times, but Gift Cards just always struck me as so impersonal and “not trying very hard”.
Call me old fashioned, but I kind of like the idea of people going out and actually picking what they think the other person might like for a gift.
Just my two pennies,
Todd
2 Lin (1127 comments.) // Nov 22, 2008 at 7:03 am
Hi Todd, I may one of very few that doesn’t have any problem with giving or receiving gift cards. Mind you, the gift cards I’ve given in the past (and will continue to give) are open loop gift cards such as Mastercard or Visa and always accompany other chosen and thought out gifts.
With the economy as it is right now, I feel that giving open loop gift cards is a very good thing, and recipients can use the cards to buy gas for their car, food for themselves or their family and other necessities that can’t be bought and shipped to family/friends not living locally.
Many people are becoming “frugal” conscience and that includes Christmas gifts, thinking more in terms of “needs” vs “wants” on their wish list, and I think that’s great.
3 Unused Gift Cards and Stores Going Out of Business ~ Trade Show Guru // Nov 22, 2008 at 4:24 pm
[…] has written a much better post Store Closings - Do Not Buy Gift Cards From Closing Retail Stores, in which she suggests an open loop gift card (provided by a bank and not tied to any specific […]
4 Michael (1 comments.) // Nov 23, 2008 at 10:53 pm
Eddie Bauer is NOT closing even close to that many stores in January.
This email that that has been going around has many untrue statements attached to it. Just on Friday Ann Taylor emailed their customers to notify them that false statements had been made and to not pay attention to them.
Not sure who created this, but customers should be careful about believing everything in this, because it seems to not be true on many levels.
5 Lin (1127 comments.) // Nov 24, 2008 at 7:50 am
Michael, I’m not aware of any mass email that has or hasn’t been passed around about store closings. If there is an email about store closings, I haven’t received it or seen it.
Some stores are closing their “low performing” stores, but are still in business and planning on opening new store locations in 2009.
A link is provided about each store mentioned to verify the information. I did, however, edit the post to BOLD type the fact that Eddie Bauer has actually OPENED several stores this year and to say that Eddie Bauer is NOT planning on anymore store closings in 2009.
6 Kennith // Nov 24, 2008 at 1:03 pm
Pep Boys is NOT closing 33 stores. In 2007 they closed 31 underperforming stores but there are NO plans for further closures of their over 500 retail stores or 6000 service bays.
7 Scott // Nov 24, 2008 at 1:45 pm
“Open Loop” gift cards are a scam. A typical card costs $4 or more just for the privilege of including AMEX in on your financial gift exchange (plus maintenance fees! plus shipping!). Here are some terms and conditions from their own website: “*Some restrictions on merchant acceptance will apply to the Gift Card. The Gift Card is not for use at airline, hotel, telecom, or ATMs. It is for use in the United States, Puerto Rico and the U.S. Virgin Islands only. Additional restrictions apply. See terms and conditions.**A $5.95 replacement fee may apply. Terms and Conditions are applied to Gift Cards. Subject to applicable law, a monthly service fee of $2.00 applies but is waived for first 12 months after purchase.
Why would you pay AMEX, or Visa, or MC so you can give money to a friend or family member? Stick with cash or check. The current economic times call for us to be smarter consumers.
8 Nick A (2 comments.) // Nov 24, 2008 at 5:31 pm
Hi,
I work at The Home Depot . . . Just wanted to let you know that we have also seen this thread re-surface as part of a mass email in the last few days. This list references old information, at least for us. We announced the closing of 15 stores back in May and have no plans to close additional stores.
In addition, our gift cards have no fees, do not expire and can be used at ANY Home Depot store.
All the best!
9 Lin (1127 comments.) // Nov 24, 2008 at 6:10 pm
Kennith, thank you for stopping by with this information. I’ve edited the post with an Update for people interested in knowing about Pep Boys to check this comment section, and will see your message.
10 Lin (1127 comments.) // Nov 24, 2008 at 6:12 pm
Hi Scott, I appreciate and respect your opinion of open loop gift cards, but I still prefer giving Mastercard Gift Cards over giving cash or any other type of gift card. That’s just my personal preference.
11 Lin (1127 comments.) // Nov 24, 2008 at 6:13 pm
Nick A, thank you for this information. The post has been edited so that those interested in knowing about The Home Depot will check this comment section and see your message. Thanks much!
12 Nick A (2 comments.) // Nov 24, 2008 at 6:16 pm
Anytime - thanks for the update to the original post.
13 Sarah // Nov 24, 2008 at 9:17 pm
Lin,
Just wanted to let you know that your information regarding Talbot’s is not correct. We do not own PacSun - we do own J Jill and we are not planning on closing any stores at all. I suggest you refer your readers to each company’s website for accurate information on which retailers are closing doors etc etc. You have no idea how many phone calls we have fielded from our loyal customers who are now fearful of shopping in our stores. Please do not post information that is not true. You are hurting retailers everywhere.
14 Lin (1127 comments.) // Nov 24, 2008 at 10:11 pm
Hi Sarah, I have removed the mention of PacSun being owned by Talbots. The links regarding Talbots and J Jill explain the “email hoax” apparently circulating that I never received or saw, and visitors can easily read the “email hoax” information by clicking on the link provided.
15 Sarah // Nov 24, 2008 at 10:21 pm
Thanks Lin for updating the information - our country needs all the positive reinforcement it can get right now with the current state of our economy.
16 gettingsingle (1 comments.) // Nov 25, 2008 at 12:14 am
From Eddie Bauer Pres. Neil Fiske:
To our valued customers:
It has come to our attention that misleading information is circulating via email as part of a hoax intended to discourage consumers from buying gift cards from a number of retailers including Eddie Bauer. We want to set the record straight.
Eddie Bauer has been in business since 1920 and operates 376 retail stores throughout North America. We also have a robust online and catalog division. In our March 2008 annual report, we announced both the opening of new locations as well as the closing of some older locations as part of our normal course of business. The stores referenced were all closed in January 2008. In 2009, we will again open and close a handful of stores as part of our normal business plan.
Eddie Bauer remains committed to providing our customers with outstanding quality, value and service, now and for many years to come. Our gift cards are a great option for the holidays. You can purchase and redeem them at any of our retail stores, through our catalogs or at eddiebauer.com. We look forward to serving you this holiday season.
Neil Fiske
President & CEO
Eddie Bauer
17 wilson (51 comments.) // Nov 25, 2008 at 4:46 am
Honestly, Lin. I was shocked when I heard this news through daily news…!
Instead of losing the money, it’s the only choice for the owners to close down the stores…
Note: I still have several Wilson Leather’s gift cards that I didn’t have time to use it lol
18 Lin (1127 comments.) // Nov 25, 2008 at 6:57 am
“Getting Single”, normally I do not allow keyword names such as yours (I only allow real names), but decided just this one time to allow your comment to come through to show the apparent message from Eddie Bauer President and CEO Neil Fiske.
**I cannot personally vouch for the contents of the message from Neil Fiske since I’ve not personally received or seen anything directly from Eddie Bauer officials about the store closings, but it appears to be legit.
19 Lin (1127 comments.) // Nov 25, 2008 at 7:03 am
Wilson, as a normal part of business, some companies decide to close stores that are low performers, but that doesn’t mean the store company is in serious financial trouble or planning on filing bankruptcy or going out of business altogether.
Normally Snopes.com is the best source to find out if email/internet circulations are true or not, or just partly true…, but even Snopes didn’t appear to have all the facts (which really surprised me).
20 Sarah // Nov 25, 2008 at 9:15 am
Lin,
Just wanted to let you know as well, there is a letter from the President of J Jill, Paula Bennett, on J Jill’s website that confirms the ‘rumor mill’ of J Jill closing. Go to http://www.jjill.com, and on the main page there is a banner that reads “Our Response to Recent Gift Card Concerns”. Click on this banner & you can read the letter from Paula that will put this rumor to rest.
Thank You.
21 Lin (1127 comments.) // Nov 25, 2008 at 9:20 am
Sarah, thank you for that information!
While there are some store closings taking place, many have already happened earlier in the year as planned closings of “low performing” stores.
Anyone concerned about the “email hoax” being passed around that I personally didn’t know about should check the news links included in this post that explain that at least SOME of the store closings are legitimate closings and SOME are part of a email hoax campaign.
22 Andrew (6 comments.) // Nov 25, 2008 at 8:19 pm
I’ve seen this report several times and I think it may be overestimating or even over-hyping the ramifications. To be sure, you don’t want to buy gift cards from the stores going under, but stores that are mentioned such as Lowes? Nothing is wrong with a store like Lowes, and although they may be “scaling back” I highly doubt anyone will have a problem with gift cards at Lowes.
23 Lin (1127 comments.) // Nov 25, 2008 at 8:27 pm
Andrew, the term “scaling back” was taken from a legitimate news website article I found while researching this post.
Personally speaking, I’ve already bought gift cards at both Home Depot AND Lowe’s, since those two stores are very popular stores for a guy on my xmas list.
24 Susan // Dec 11, 2008 at 8:12 am
“Open Loop” gift cards may seem like a great choice, but in my experience, the purchase of these cards includes an addtitional fee which goes to the card’s company…not a fee you would have to pay with a store-specific gift card.
25 Lin (1127 comments.) // Dec 11, 2008 at 8:48 am
Hi Susan,
Mastercard gift cards and other open loop gift cards are my personal favorite regardless of the fees. Gifts cards for specific stores, such as Home Depot, can only be used at Home Depot stores. I’ve bought Home Depot gift cards myself, but there are others on my Christmas list that much prefer to be able to buy a little bit here and a little bit there, going to different stores with the same gift card until it’s all used up. It’s really a matter of preference.
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