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Unused Gift Cards and Stores Going Out of Business

November 20th, 2008 · 25 Comments · Random Stuff

I’m not a fan of gift cards, but I understand why businesses like to sell them. They get the money when the card is sold, but then don’t have to provide the product or service until the card is used. I’m going to guess that a significant portion of gift cards are never used, or or partially used and then lost before the balance is spent. Some businesses even start deducting a percentage of the balance from the card if it isn’t used by a certain date. We have several gift cards around here for places we seldom shop, and I don’t know which ones have what amount of money on them. Arrggg. If you ever want to give me a gift, there is nothing wrong with hard, cold cash. 🙂

Anyway, I just received a forwarded email warning about the following stores closing,  and recommending that if you have a gift card at one of them, you’ll want to use it before your local store disappears. Some businesses are just closing some of their stores. Some businesses are going under and are closing all of their stores. On the bright side, if you go shopping at any of these stores, you’ll probably get some good “store closing / going out of business” discounts, though the selection will obviously be picked over and limited.

More to the point, I think the following list is very sobering. It points out our current economic situation, and the economic challenges ahead.
Without further ado:

Ann Taylor – closing 117 stores

Bombay – going out of business, closing all stores

Cache – going out of business, closing all stores [1/8/09 incorrect, see comments below]

Circuit City – closing 155 stores, will the company survive? See the end of this post.  [1/20/09 update: Circuit City is going out of business]

Disney – closing 98 stores, more after January

Eddie Bauer – closing 27 stores, more after January

Ethan Allen – closing 12 stores

Footlocker – closing 140 stores, more after January

Home Depot – closing 15 stores

GAP – closing 85 stores

J.Jill – going out of business, closing all stores [incorrect, see update below]

K B Toys – closing 356 stores [1/20/09 update: our local KB Toys store is gone, as are all KB Toys stores in California it appears]

Lane Bryant, Fashion Bug ,and Catherines – closing 150 stores

Levitz – going out of business, closing all stores

Linens and Things – going out of business, closing all stores

Macys – closing 9 stores

Movie Galley – going out of business, closing all stores [update – Movie Gallery closed 160 stores as part of reorganization plan to exit bankruptcy. The video rental company plans to close 400 of 3,500 Movie Gallery and Hollywood Video stores in addition to the 520 locations the video rental chain closed last fall.]

Pacific Sunware – going out of business, closing all stores [1/8/09 incorrect, see comments below]

Pep Boys – closing 33 stores

Piercing Pagoda – going out of business, closing all stores

Sharper Image – going out of business, closing all stores

Sprint/ Nextel – closing 133 stores

Talbots – going out of business, closing all stores UPDATE – From Maureen’s comment below:”Talbots is not closing all their stores, they have closed their men’s and children’s clothing stores, but NOT the woman’s.” I have also read that “Talbots announced on Nov. 6 that it will try to it’s troubled J. Jill division”.

Whitehall Jewelers – going out of business, closing all stores

Wickes Furniture – going out of business, closing all stores

Wilson Leather – going out of business, closing all stores

Zales – closing 82 stores, 105 after January

“Going out of business” may mean just that, or it may mean that the business is closing its brick and mortar retail business, but may try to keep a online retail presence. I haven’t had a chance to fully verify the above list. Let me know if you see any errors.

RT, a friend of the trade show guru and the Master of the Philippines recently wrote a post on Circuit City closing stores titled Goodbye, Circuit City, and Good Riddance . Perhaps I should change his name to RT, the Crotchety Master of the Philippines?

UPDATE (Nov 22) -Based on a comment below by Laurie, I looked into the above list a bit more. As I said in my post, I hadn’t verified the whole list. It turns out that part of it is wrong, but some of it is definately right. The incorrect information that I have found at this point is that J.Jill is not going out of business. Per the J.Jill website: “We DO NOT plan to close all of our stores.” The reader may note that J.Jill says “all” and not “any”, and that in addition the parent company Talbots announced on Nov. 6 that it will try to it’s troubled J. Jill division.

LIn 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 store), and also links to news reports for each of the stores or businesses closing stories. She obviously put a lot of effort into her post and I recommend you read it.

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25 responses so far ↓

  • 1 RT Cunningham // Nov 20, 2008 at 8:56 pm

    Ahem! That’s “crotchety”, Steve.

    I didn’t know about this list. Most of them have one thing in common — their products are overpriced in their local markets. I think we need an economic slowdown like this ever few years in order to kill off the overly greedy companies (I think they’re all greedy).

  • 2 The Trade Show Guru // Nov 20, 2008 at 11:49 pm

    hi RT,
    Typo corrected (I had written “crotchtey”). No need to be subject to whims, crankiness, or ill temper! 🙂
    I think recessions are a necessary part of the business cycle and serve to weed out high-priced, non-competitive, and/or poorly-run businesses. That said, they are painful, and I feel for most of the people who will lose their jobs.
    We have several of the above stores where I live. I’m not sure we needed so many women’s clothing stores, though the women around here may disagree. 🙂
    ~ Steve

  • 3 Lin Burress @ Telling It Like It Is // Nov 21, 2008 at 8:56 am

    Hi Steve, I read a story in Newsweek yesterday that listed a few of these store closings, but your list is much more comprehensive. As much as I’d prefer NOT to get anyone gift cards for Christmas or Birthday gifts, some of our gift recipients actually prefer them over anything else. I appreciate you taking the time to list all these store closings and the concern about the gift cards not being any good.

  • 4 The Trade Show Guru // Nov 21, 2008 at 1:22 pm

    Hi Lin,
    Thanks for your comment. I realize now in re-reading my post that perhaps I am the one sounding “crotchety”. Gift cards are sometimes very appropriate, and I wouldn’t complain if I got one for Trader Joes where we shop a lot anyway. While my first paragraph is all about gift cards, what really struck me when I got wrote this post was the list of stores closing. As I replied to RT above, I don’t have a problem with a recession. But if that “r” becomes a “d” I’d be worried… I’ll try to write about a lighter subject next time. Thanks as always for dropping by. ~ Steve

  • 5 Laurie // Nov 22, 2008 at 2:17 pm

    I just read on J Jill website that they are not going out of business and that in fact will be opening more stores in ’09. Makes me wonder how much of that list is true. I also received the same list in this mornings email

  • 6 Steven // Nov 22, 2008 at 3:33 pm

    I found this article interesting but was surprised that it focused on the store closures but had no mention of the stores being opened. Gap inc. is a great example, they are closing 115 stores but opening another 100 in fiscal ’08. I do agree that your readers should do their due diligence before purchasing a gift card, but they should also realize the fact that most of the retailers above open and close stores on a regular basis to optimize their real estate positioning and remain profitable.

  • 7 The Trade Show Guru // Nov 22, 2008 at 6:15 pm

    @Laurie, Thanks for your comment. I looked into it, and the J.Jill information is wrong, though based on their current business situation I wouldn’t recommend buying any of their gift cards. I updated my post because of your comment. Thanks for your input!
    @Steven, Good point. There is a difference between some stores closing and all the stores and the business closing. That said, if I have a gift card and my local store closes, and I have to drive 100 plus miles to go shopping with it, I would be upset. Businesses do open and close stores on a regular basis, though my impression is that companies like McDonalds do a lot of planning in advance and seldom if ever close restaraunts. Closing more than a few stores to my mind is an indication of over-expansion or poor planning. Thanks again for your comment!

  • 8 Tim // Nov 22, 2008 at 10:49 pm

    It is sad , really. People out of work. Also, that is going to leave a lot of empty buildings….
    Well, one business that is going great guns is Blue Beaver Beer. Why, I think they had record sales again his year. Those Super Bowl commercials really help 🙂

  • 9 Lin Burress @ Telling It Like It Is // Nov 22, 2008 at 10:56 pm

    Hi Steve,

    While researching the information about the store closings, I found some of the information is basically a hoax that was passed around through mass email (which I wasn’t aware of).

    There are some store closings that are legit, whereas others are going through “reorganization” and closing low performing stores.

    “Open loop” gift cards are the best gift cards anyone could buy, like Mastercard, Visa, Discover or American Express gift cards. I personally despise American Express simply because many places don’t accept AE.

    Anyone looking to buy gift cards should seriously consider open loop gift cards.

    P.S. You really need to get Woopra my good man. Watching the traffic to my post and seeing people coming over here makes me feel good. Linky love for you. 🙂

  • 10 Maureen // Nov 23, 2008 at 9:48 am

    FYI – Talbots is not closing all their stores, they have closed their men’s and children’s clothing stores, but NOT the woman’s.

  • 11 Will // Nov 27, 2008 at 1:10 am

    It is a sobering list, but a good point was made in a comment above that you need to look at the whole company. Many businesses close poor performing stores while opening new stores they hope will perform well. Some on the list are indeed in big trouble, though, no matter how you look at them.

    I saw the exact percentage somewhere of gift cards that are not redeemed. I don’t remember the number, just remember being very surprised at how high a percentage it was. Not quite as high as the number of mail in rebates that are not redeemed. I have read that 60% of those are not redeemed!

  • 12 The Trade Show Guru // Nov 27, 2008 at 1:55 am

    hi Will,
    Thanks for stopping by. I’ve heard the same thing (that the majority of mail-in-rebates are never redeemed). That’s ok by me if it allows companies to offer bigger savings for those that do send them in. I think they are a pain, but occasionally I’ll buy a product because of the rebate, and then I definately send it in.
    ~ Steve

  • 13 Sara // Dec 1, 2008 at 1:10 pm

    According to Snopes.com and a friend of mine who works at Lowe’s Hardware They will not be closing any stores. They are opening 115 to 120 new stores in 2009 and so on. Just an FYI Hope I could help

    Sara

  • 14 Sue // Dec 1, 2008 at 1:26 pm

    Thanks for the update. It took me a long time to find J.Jill and I would hate to lose it. Sorry to see so many businesses going under. I hope that the closings slow down. What I read was a massive amount of people without jobs.

  • 15 The Trade Show Guru // Dec 1, 2008 at 1:41 pm

    @Sara, Thanks for your comment. For my readers, I had included in my list the statement: “Lowes – closing undisclosed number of stores”. I realize now I should never have included such a vague and therefore meaningless statement, and have deleted it. According to a press release I just found on Google news, Lowe’s is planning to open an additional 75 to 85 stores in 2009. With the housing bubble collapse, I would be surprised it they actually open any stores, but there is no indication they will be CLOSING any stores, so I wouldn’t recommend NOT buying a Lowe’s gift card.
    @Sue, Thanks for stopping by. It sounds to me like J.Jill is on tough times (“distressed” is the word press releases use) so I would not recommend buying any gift cards there, but that doesn’t mean one shouldn’t shop there if one likes their clothing line, and it also doesn’t mean they won’t turn the business around and be around for a long time. ~ Steve

  • 16 Kristi Cauldwell // Jan 1, 2009 at 3:45 pm

    “Cena-To-Go” (prepared meals) local store went out of business. I have a balance of $62.45 left on my original Gift Ctf. of $100.00. Marked on the back of the card in handwriting is “good at Plainville location only.” So I’m out of luck, I guess….

  • 17 The Trade Show Guru // Jan 1, 2009 at 3:57 pm

    Hi Kristi,
    Ouch! Thanks for your comment though. I would think that given the Plainville store went out of business, another branch (if there is one) should honor it, unless it’s a franchise… Bummer. ~ Steve

  • 18 Trish // Jan 2, 2009 at 7:35 pm

    I tried to verify with Talbots which stores would remain open but alas no answer! I just received the Spring catalog and if the prices stay in this range they will be closing!!

  • 19 The Trade Show Guru // Jan 2, 2009 at 8:22 pm

    hi Trish,
    Thanks for stopping by. I would say that this is a good case for “Buyer Beware.” It’s frustrating when you can’t get answers, but business seldom let you know in advance when they’ll be closing stores… ~ Steve

  • 20 Sue Keppel // Jan 3, 2009 at 1:03 pm

    KB Toys in Erie Pa is closing and I have a game that I need to return. Is there a KB store in FT lauderdale that is still open?

  • 21 The Trade Show Guru // Jan 3, 2009 at 2:12 pm

    hi Sue,
    Sorry, I don’t know, but you can check the store locator on their website at kbtoys.com Seems like a long way to drive. 🙂 Our local store in California closed or is closing, and their website says there are no stores left in California now. 🙁 ~ Steve

  • 22 Jamie // Jan 8, 2009 at 1:18 pm

    Cache is not going out of business and this is a terrible rumor! I suggest that you check your sources more thourougly. Sincerely Jamie Huston.

  • 23 The Trade Show Guru // Jan 8, 2009 at 1:43 pm

    hi Jamie,
    Thanks for your comment. I updated the list. I checked and it appears that Cache closed or will close some stores (20 to 23?), and reported a 19% drop for same-store sales in December. The company is not going out of business, but does appear to be having a tough go of it, so I would recommend “Buyer Beware” on any gift cards from them.
    Thanks for stopping by! ~ Steve

  • 24 Ja // Jan 8, 2009 at 8:19 pm

    pacific Sunwear is not going out of business or closing any of there stores. i work for the company personaly and because of all these rumors corporate head quarters sent out an email to most of our customers stating that we are not closing anystores. in fact we are opening 3 new locations in the jersey area.please correct this so there is no further confusion. thank you

  • 25 The Trade Show Guru // Jan 8, 2009 at 9:09 pm

    Ja,
    Thanks for your comment. I updated the list. I checked and found this AP report dated Jan 4, 2009, which may account for the confusion:

    “Retailers Pacific Sunwear of California (PSUN) and Talbots (TLB) both announced Friday that they will close chains that did not fit their core business.
    Pacific Sunwear the surfing-inspired teen clothing retailer, will close its struggling chain of 154 demo stores,, which sell urban-inspired clothing, “as soon as is practical” and take a charge of up to $50 million.
    “It is in the best interests of our investors to close our remaining demo stores and concentrate our efforts on our core business,” Chief Executive Sally Frame Kasaks said.
    In October, Pacific Sunwear said it would close its trendy One Thousand Steps shoe boutiques and was exploring alternatives for demo. Wall Street had complained for years that demo was a drain on profits at Pacific Sunwear.
    Demo, which launched in 1998, has struggled to find an audience at malls for hip-hop fashions that are at odds with the colorful, California surfing-inspired looks seen at Pacific Sunwear’s main chain of PacSun stores.”

    ~ Steve

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