Toys R Us has gone into liquidation in the US. If you’re holding onto some Toys R Us or Babies R Us gift cards, now would be a good time to cash in.
The Australian arm of Toys R Us has insisted it’s business as usual despite the closure of its parent company. However, the company’s chief executive David Brandon has indicated it may also liquidate stores in France, Spain, Poland and Australia.
Regardless of Toys R Us’ fate in Australia, we find its best to err on the side of caution.
In the US, the toy store chain announced that it will honour gift cards for the next 30 days. After that they will become virtually worthless.
“If there is value left after the company physically closes, you become an unsecured creditor,” explains Tom Olk, vice president of online gift card marketplace Raise.
“In the repayment waterfall, you will be placed behind any secured credit holders, such as debt holders or loan providers. As a result, you would receive only pennies on the dollar – if you even receive that much.”
The situation in Australia following a potential shutdown would be similar to what’s happening in the US, as we learned during Dick Smith’s closure. In short, spend your gift cards. Now.