Spareparts has no spare change: Saskatoon-based company goes bankrupt and cuts off gift cards
If you purchased a gift card with any Spareparts store, you may be disappointed to learn you can't buy anything with it.
The Saskatoon-based sunglasses and accessories stores filed for creditor protection in October. When the company went into receivership on Tuesday the pre-paid denominations became valueless.
A new policy set in place by the receiver indicates gift cards will no longer be reimbursed or redeemed in-store, according to a sign posted at the Saskatoon business. Locations in Alberta and British Columbia confirmed they are also following the new rules.
The sudden closure of the Regina store on Wednesday left customers like Brooklynn Leibel frustrated.
"Even if they didn't know an end date, knowing the business is shutting down, I don't know how they were still selling gift cards that now have no value," said Leibel, who purchased $300 worth of cards at the Regina location last week.
A chain of closures
Danny Mysak, chief executive officer of the Saskatchewan and Alberta stores, told CBC he filed for creditor protection with the Court of Queen`s Bench of Alberta on Oct. 5. He said the plan was to restructure the business but it unfortunately went into receivership.
Moving forward, KPMG — a Canadian audit, tax and advisory service — is responsible for the company's assets and rights.
Mysak said he had no idea the new policies would void the gift cards' value. As of Tuesday, the 25-year owner said he had no control over policies.
The consent receivership order indicates KPMG decided to terminate all use of gift cards as of Dec.12.
"This is upsetting to me," said Mysak. "I've been in business a long time and the only way you stay in business for a long time is if you care about your customers."
The Regina location was the first in Western Canada to shut down on Wednesday. But seven stores in Ontario have done the same, including operations in Waterloo and Toronto.
Operations in Alberta and British Columbia will remain open indefinitely.
'Business as usual'
An internal announcement was sent out to employees regarding the current bankruptcy just days after Mysak filed, according to former Regina store employee Jodie Vandergrift.
"Management said it was a bankruptcy reallocation and we had nothing to worry about," said Vandergrift, noting high-ups didn't elaborate on what that meant for the company.
"They told us it was business as usual," she said, adding that selling gift cards wasn't out of the ordinary.
Vandergrift quit just 10 days after the company filed for bankruptcy.
Mysak said it was always his intent to restructure the business in hopes of keeping it afloat.
Null and void
An email response to Leibel from KPMG states the amount could be reimbursed only if it was purchased with a credit card.
"Knowing I threw that much money in the garbage at Christmas is devastating," said Leibel, who made the payment on her debit card.
The email also indicated Spareparts customers should check with their banks and credit card companies to see if a refund might be possible.
KPMG declined to comment.
