More on Store Closing & Gift Cards

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Store Closings: What They Mean for Gift Cards, Warranties & Saving!

By Jessica Reinhart

You’ve likely noticed the hordes of “Going Out Of Business” signs posted along busy intersections and mall entryways across the country. Given current economic conditions, many popular stores are planning to close some or all of their doors forever in the coming months. Following these tips will ensure that you get what’s coming to you… and maybe even score some really great deals:

Know the lingo. “Bankruptcy” seems to be the newest buzzword. As far as retailers are concerned, Chapter 7 and Chapter 11 bankruptcy are the most common. Chapter 7 means they’re closing down permanently and liquidating assets to pay off creditors, while Chapter 11 means they plan to reorganize (i.e. make layoffs and close down some stores) but continue to stay in business.

Clean out your wallet. Dig out those pretty gift cards and store credits you’ve been saving for a rainy day. If any of them are on the list of doomed retailers call the store nearest you and ask about their policy. Retailers who have filed for Chapter 11 bankruptcy will often continue to redeem gift cards, while those who file for Chapter 7 may not make good on them. If this is the case, you have two options: 1. If you paid for that gift card with a credit card, you can dispute the charge directly with your card holder; or 2. If you paid with cold hard cash, check or a debit card, you can file a claim with the bankruptcy court administering the process within 90 days of the filing date. For more information on filing a claim, check out www.uscourts.gov. Bottom line – if your gift card is still valid, redeem it as soon as possible.

What about that warranty? It depends. Warranty validity will vary with each bankruptcy. Manufacturers warranties will not be affected because a retailer went out of business and extended warranties that are backed by a third party is usually not affected when a retailer closes shop.

Cash in on the savings. You can expect retailers who are in the black to slash prices 60-90% right down to the last day of business. Inventory is sure to dwindle, but you can expect prices to near rock bottom during the final weeks of operation. Our recommendation? Stake out your favorite stores early and often – especially if you have your eye on something special.

Retail Slump Could be Boon to Buyers

by Janet Cho of The Plain Dealer

“With most retailers expecting a crummy Christmas, glad tidings may await cash-strapped consumers. In normal times, the day after Thanksgiving, when stores traditionally kick off the Christmas shopping season with door-buster sales, is seen as the time to snag some real bargains.”

“But this year, the wobbly economy and plummeting consumer confidence caused worried retailers to start slashing prices weeks before the day known as Black Friday. Retailers count on Black Friday to help them turn a profit for the year. Analysts use the day to gauge whether deal-conscious consumers are in a spending mood. And if shoppers aren’t in the mood, the deals could get much better later.

“If they’re not finding things at a price they’re wiling to pay, they may be willing to wait a little while,” said Erin Herskowitz, spokeswoman for the International Council of Shopping Centers, a trade association based in New York City. That’s the sort of thing retailers don’t need to hear.”

“A recent survey by Vertis Communications in Amesbury, Mass., found that 60% of Americans plan to cut back on their purchase, vs. only 40% who said so last November. The key for retailers is drilling home the idea that the deals shoppers will score on Black Friday are worth making the effort to get out there. For most malls and shopping center, Friday will be the first time this year that they see significant traffic in their stores and parking lots.”

“Last year, 66 million shoppers turned out for Black Friday, according to the National Retail Federation. And despite – or, perhaps, because of – tighter holiday budgets, more people are expected to brave the crowds this year, including people who usually don’t shop on Black Friday, according to the International Council of Shopping Centers. “Regardless of the economy, crowds will still turn out to shop, “because people who enjoy Black Friday enjoy the event and enjoy the event…” Kopacz said.

"One out of four Black Friday shoppers is expected to be at the stores by 5 AM. Kohl’s and J.C. Penney will open at 4 AM, followed by Macy’s, Wal-Mart and Best Buy at 5 AM and Target at 6 AM."

“85% of shoppers are looking to buy electronics, such as video game systems, iPods and MP3 players, flat panel TV’s, cell phones, camcorders and home theater systems, Consumer Reports says. Prices on big-screen HD televisions had already dropped by hundreds of dollars when Circuit City Stores announced it was closing 155 stores and liquidating its inventory before the end of the year. Best Buy will be selling a limited number of 52” Samsung flat-panel LCD HDTVs, plus installation and free shipping, for $1499.99, down from $2,299.99."

“Consumer electronics are going to be deeply discounted this year, we know that,” said Marti Kopacz, national managing principal for Grant Thornton’s Corporate Advisory and Restructuring Services in New York. “The Circuit City liquidations will push all other pricing down. Bes But as well as regional stores, all of them are going to have to drop prices.”

Black Friday sales typically account for about 10% of all Christmas sales, but Herskowitz of the shopping centers council said that percentage could increase this year. While sales at clothing, department and luxury stores are weak, she said wholesale clubs and discount stores, particularly Wal-Mart and BJ’s Wholesale Club, continue to fare well.”

“So far this year, cozens of retail companies have declared bankruptcy, closed stores or both. Despite dire warnings that more stores will close after the holidays if sales disappoint, retailers continue to project results as rosy and upbeat as the carols being played over their speakers. “Retailers are the most optimistic group of people you will meet in your entire life.” Kopacz said, “and the sun will always come up tomorrow.”

Black Friday

Black Friday is only 3 days away, and thanks to the magic of the internet, you no longer have to wait until Thanksgiving Day to find out what is going to be on sale. Black Friday 2008 is a website with all the sales at 45 major retailers. Check it out at
http://www.bfads.net

You can get a jump start on planning your holiday shopping and making your lists. Be realistic when setting your shopping goals and have a backup plan. Shopping is going to take a lot longer than it normally would, and some things are going to be gone by the time you get to them. Anticipate that there will be large crowds. Everyone is feeling the pinch of the economy and people that might otherwise not concern themselves with the madness of shopping the day after Thanksgiving will be looking for a bargain too.

Using a plan will help you figure out how to make the most biggest retail shopping day of the year. After all, you don't want to stand in line for an hour to get into WalMart for two items if the bulk of the purchases you want to make are at Target. Plan to shop with a friend or family member so that each of you can hit different sections of the store(s) simultaneously thus doubling the odds that you each get the items that you set out for. Then meet back up in a central location and swap stuff around. In the past I've even seen one person take a place in line while a 2nd person did the shopping. That way when the shopping was done they didn't have to go to the end of the line and wait an extra 30-45 minutes to check out. Try to map your route in a logical manner, shopping at stores that are near each other at the same time, so that you aren't wasting time and gas driving back and forth all over town.

Using a list will help keep you focused and on budget when you're being caught up in the shopping frenzy of bargain hungry crowds and stacks of discount merchandise, and buying everything in sight. It will also help to keep you from spontaneous purchasing small gifts for every cousin, babysitter, and neighbor that you ever had just because it's "so them" and "such a good price". Those small purchases add up to a big checkout total, and that defeats the whole purpose of shopping on Black Friday. Remember, a bargain isn't a bargain if it's something you don't need, wouldn't normally buy, and/or you are still paying for it in February.

Which brings me to another important shopping tip - shop with cash! You are more likely to stay on budget. Studies have proven that people who use plastic, whether it's a debit card or a credit card, spend 12%-18% more. Plastic doesn't have the "Ouch" factor that cash has.

It's going to be a jungle out there but with a little planning, and a good attitude, you can survive and knock out the bulk of your Christmas shopping at huge savings. Then you can take the next 3 weeks to do what you really should be doing during the holidays - enjoying the season with family and friends.

Happy Shopping Everyone!