Experts: Sears warranties solid, but use gift cards now
Now that Sears and Kmart have closed more than half of their stores over the last five years and the formerly dominant retail giant has officially filed for bankruptcy, customers are left wondering what will happen to gift cards and warranties from the stores.
Gift cards are still being honored, but experts advise consumers to use them as soon as possible. An attorney for Consumer Reports warned that the bankruptcy court will rule whether the stores must honor gift cards, and onsumers who have them may have to fight in bankruptcy court to get their money, which could take years, the attorney said.
Earlier this year, Toys R Us announced it would be closing all its stores. Following the announcement, the store accepted gift cards for several weeks into the liquidation process before giving a deadline for customers to use them.
While Toys R Us closed all of its stores, Sears and Kmart still have hundreds of locations open for consumers to use gift cards. Danbury Fair mall has the only Sears that is still open and not slated to be shuttered in western Connecticut. The company announced this week that the Sears store in the Connecticut Post mall in Milford would close. The Kmart in Milford is also slated to close this year.
Sears is one of the original tenants at Danbury Fair, which opened in 1986. In 2016, Sears gave up 70,000 square feet of its lease in the mall to European fashion store Primark. Sears still operates out of 106,000 square feet and has “Now Hiring” signs at its entrances.
There were more than 2,000 Sears and Kmart stores in the U.S. five years ago. There are fewer than 687 now with more closing before the end of the year. The company warned that all stores may close if it can not reach a viable restructuring agreement in bankruptcy. Sears announced its restructuring plan, which included the closure of 142 more stores, on Monday.
The warranties for Kenmore appliances, which are no longer made by Sears but still sold at its stores, are likely to be honored, experts said. The warranties for other brand appliances sold at Sears would also be honored as the warranties are through the manufacturer.
According to Business Insider, a Sears spokesman said the company is “required to meet regulatory requirements designed to provide adequate resources to fulfill service contracts into the future. We will fulfill our commitment to our customers and members.”
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