Better use your Bon-Ton gift card now, experts say
A memo to holders of gift cards from Boston Store, Younkers and other outlets in the chain of bankrupt Bon-Ton Stores Inc.: Get to the cosmetics counter, men’s department or furniture section sooner, rather than later.
In fact, go now, Consumers Union senior staff attorney Christina Tetreault suggests.
“Run — don’t walk — to use your gift card,” she said.
Courts often allow retailers to continue to accept gift cards after a bankruptcy filing — and plenty of retailers have filed lately — but they’re not required to do so, Tetreault said. That potentially can leave gift-card holders waiting in a long line of companies and individuals with claims against a bankrupt company, perhaps with little chance of receiving more than pennies on the dollar.
Court documents indicate the liquidators who submitted the winning bid for Bon-Ton in a bankruptcy auction Tuesday will honor gift cards for at least the first 10 days of the going-out-of-business sales across the chain’s more than 200 remaining stores.
Still, promptness is advisable. “I always believe if you can get them honored, use them as soon as possible,” bankruptcy attorney Timothy Nixon of Milwaukee law firm Godfrey & Kahn said.
Jerad Albracht, spokesman for the Wisconsin Department of Agriculture, Trade and Consumer Protection, said there are no specific regulations that oversee a business closure, so consumers who have outstanding cards are advised to use them as soon as possible.
As for any Bon-Ton warranties on previous purchases, forget it.
“They’ll be worthless,” said Marquette University Law School professor Ralph Anzivino, whose teaching areas include creditor-debtor law and business bankruptcy.
“Those warranties have no value,” he said. “They’re converted into a claim, an unsecured claim.”
Even before the auction of Bon-Ton to liquidators, the company — using a different firm — was conducting going-out-of-business sales at 42 of its weakest-performing stores. So far, three clearance centers and one department store have closed, but all 42 are slated to be shut down by the end of April.
The start of the going-out-of-business sales for the rest of Bon-Ton’s locations has not been announced. The companywide liquidation sale is expected to run 10 to 12 weeks but could last as long as until Aug. 31.
Bon-Ton operates co-headquarters in Milwaukee and York, Pa. Along with Boston Store and Younkers, it operates stores under the Bergner’s, Bon-Ton, Carson’s, Elder-Beerman and Herberger’s brand names.