Toys R Us Collapse: What Aussies Need To Know

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Back in March, the Toys R Us American arm went into liquidation and started to shutter stores. The future for Australian Toys 'R' Us stores looked grim and today, Toys R Us has gone into voluntary administration. If you're holding any sort of gift cards for Toys 'R' Us or Babies 'R' Us, or have pending orders or lay-bys - here's what you need to know.

Prospects don't look any good for Toys 'R' Us and Babies 'R' Us across Australia and, following similar advice given to our American counterparts back in March, it would seem wise to cash in any gift cards you may have.

If you're not familiar with the process, a company enters into voluntary administration when it has become insolvent - it can no longer pay its debts. This external administrator essentially has a look over the books and explores the options the company has: Can it return to making money or does it need to be sold off? It's a tragic outcome for Toys 'R' Us that also leaves customers in the lurch because of the various ways trading is affected.

For Australia customers, here are the things you should not, should you need to use gifts cards, perform returns or order goods from Toys 'R' Us online:

1. You can no longer purchase the gift cards from the Australian storefront
2. If you have placed an order online - you will still receive your order, provided that Toys 'R' Us currently has stock
3. No new deposits or lay-bys will be accepted. You can pay off existing deposits and lay-bys, however.
4. Importantly, gift cards can be utilised, but the total transaction must account for double the value of the gift card, meaning if you spend $50 via gift card, your transaction must be worth $100 minimum.
5. Returns will no longer be accepted. You can only exchange goods. Cash refunds are not available for returned stock.
6. You will no longer earn VIP Club points.
7. There will no longer be baby registries at Babies 'R' Us.

You can read the full FAQ for customers from McGrathNicol here.


Comments

    Hey Jackson Ryan, I'd be keen to know how they can legally get away with changing the conditions on the use of a gift card after purchase? You'd think that would fall afoul of the ACCC?

      I imagine things change once a business goes into voluntary administration and the normal rules don't apply anymore.

      Gift cards are a weird thing. They actually fall into their own category.
      See the dicksmith gift card debacle.
      A gift card is a line of credit and when a company becomes insolvent you become an unsecured creditor meaning you may never see your money return.
      When the terms are changed during insolvency it's in essence a deal between you and the business outside of normal rules as a way to recoup owed money's. You can accept or deny it, if you do not accept you them stay as an unsecured creditor and have to argue with the liquidators to get your money back but you will be certainly at the bottom of the queue.

    Particularly since they can't really be sued once in administration (and you've be unlikely to collect money anyway they can effectively get away with it even if it's not legal.

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