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KB Toys to redeem Gift Cards during Bankruptcy

As announced in this post, KB Toys has filed for Chapter 11 bankruptcy protection and will be closing all stores. The main question, as far as this site is concerned, is whether they are going to redeem gift cards during the liquidation. While there have been reports from various KB Toys stores that they are still redeeming gift cards, we wanted to see an official announcement to support this claim.

Well, we did not have to wait long. According to this report from the Associated Press (AP), the bankruptcy judge overseeing the case has granted all of KB Toys’ first-day motions, which include approval to continue the redemption of gift cards. Yay!!!! The AP reports that the company currently has about $12 million in outstanding gift cards.

In my previous post, I had stated that companies that are in liquidation have no incentive to honor outstanding gift cards. I was wrong. According to an attorney for KB Toys, Joel Waite, there is actually an incentive for companies going out of business to redeem gift cards since customers redeeming the cards often spend more than the amount on the cards, thereby helping to move more merchandise during the going-out-of-business sale. That makes a lot of sense.:)

So, if you have a KB Toys gift card, you now have a final opportunity to use it or lose it.

 

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7 Comments

  1. Debbie

    Well, I went to KB toys today to redeem a gift card and they would not honor it. So much for that.

  2. That is what happened to us too. The worker reported “you are a creditor too, you lose”

  3. Michelle Reynolds

    I went to the KB Toys in Chelmsford, MA where there was a big sign NOT redeeming gift cards with the ph# 800-333 toys, can’t get a human on the phone. I also called the KB toys in Burlington, mA who is also not redeeming gift cards, they also said there is no longer a main office, so too bad! Thankfully, I only had a $10 gift card.

  4. Dolores

    We had the same problem- $30 birthday gift card for son- 3 different Massachusetts KB toy stores told us-tough luck. Some worded it a bit nicer-barely.

  5. Deann Burnett

    THIS IS SO UNFAIR. MY SON HAS A $50.00 GIFT CARD FOR CHRISTMAS HE GOT FROM HIS FRIEND AND HE CAN NOT USE IT. ~~~~****SO UNFAIR****~~~~SO HIS KIDS DONT GET TO HAVE A CHRISTMAS BECAUSE K*B TOYS CORP. IS NO LONGER AROUND. SO SO SO UNFAIR.

  6. Kristin

    I have 2 giftcards for my son’s, what do I do with them now?They got jipped…

  7. i was looking for information on how my daughter can redeeem her K B toys gift card, if i can. please help me.

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