What shoppers should do if Sears files for bankruptcy
For years, there have been reports of Sears spiraling toward the corporate graveyard alongside other popular brick-and-mortar retailers.
The company, once one of the great brands of America, has managed to stay afloat in recent years by borrowing cash from its CEO and selling off desirable assets such as real estate and its brands.
Now, reports say Sears is working with advisers to prepare to possibly file for bankruptcy, as soon as this week. But just because Sears Holdings Corp. might be in trouble doesn’t mean consumers have to be.
In the wake of all that’s happening, here’s what Sears shoppers should know:
Question: Will my local store close?
Answer: Possibly. So far, Sears has announced that 46 of its underperforming stores are closing in November. The plan involves shutting down 13 Kmart locations and 33 Sears stores in several states.
Q: Can I still use my gift card?
A: Yes – at least for now. But experts suggest that you put them to use ASAP.
“In general, people shouldn’t hold on to gift cards,” said Katherine Hutt, director of communications for the Council of Better Business Bureaus. “They should go and spend them as soon as they can, regardless of the status of the company.”
Q: What’s the best time to shop for deep discounts?
A: Now – maybe. “When retailers close stores, they are likely to have some sales. You have to be careful, though. Yes, some items are going to be deeply discounted, but it is also likely they will be marked ‘no return,’ ” Hutt said, because there may not be a store to return to.
Q: Will Sears still honor my extended warranty?
A: Until the point at which a company files for bankruptcy, warranties and return policies will likely be “business as usual,” Hutt said.
However, when Sears closed down its Canadian stores last year, the retailer stopped honoring extended warranties. “After Oct. 18, Sears will no longer be in a position to honor Sears Protection Agreements to customers,” the chain said in a 2017 release.
Refunds on protection agreements were only allowed if purchased within 30 days of the company’s liquidation announcement. The good news is that some other companies stepped in to honor the agreements and perform repairs at no cost to customers. But that’s no guarantee.