Rush to Redeem Toys R Us Gift Cards Before Liquidation

(Image credit: © Micah Young)

If you're carrying Toys R Us gift cards or Babies R Us gift cards, you only have a few weeks to spend them ahead of the bankrupt retailer's planned liquidation. Or until April 5, to take advantage of another option.

The New Jersey-based retail chain announced in mid-March it will be closing all of its U.S. and Canadian stores over the next few months. At the same time, company officials said gift cards to Toys R Us and Babies R Us would be honored only until April 21.

But another retailer ponied up a different option this week. Bed Bath & Beyond said it has teamed up with online gift card retailer CardCash to exchange Toys R Us or Babies R Us gift cards for a reduced Bed Bath & Beyond or buybuy BABY -- a division of Bed Bath & Beyond -- eGift card. It's at a reduced rate, however, according to CNN; $20 -- the minimum -- Toys R Us gift cards net $12.84 for a BB&B eGiftcard (it will be emailed within one business day of redemption and can be used online or at a bricks-and-mortar Bed Bath & Beyond). Here's how.

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Likely your best bet: Get to a Toys R Us or Babies R Us store and redeem your store gift card for full value.

Industry experts are encouraging cardholders to spend down those gift cards as soon as possible, rather than be stuck with worthless gift cards in their wallets.

"Your best bet is to spend gift cards right away," says Tom Olk, vice president of risk at Raise, an online reseller of gift cards. "Otherwise, if there is value left after the company physically closes, you become an unsecured creditor. In the repayment waterfall, you will be placed behind any secured credit holders, such as debt holders or loan providers. As a result, you would receive only pennies on the dollar...if you even receive that much."

Toys R Us hasn't fixed a date to its shutdown of its 735 U.S. stores. It filed motions in U.S. Bankruptcy Court seeking approval of the liquidation.

Toys R Us has been operating under bankruptcy protection since September 2017.

The company's CEO, David Brandon, told staffers the company will keep operating the Babies R US baby registry as well as the online Babies R Us store as it seeks a buyer.

Bob was Senior Editor at Kiplinger.com for seven years and is now a contributor to the website. He has more than 40 years of experience in online, print and visual journalism. Bob has worked as an award-winning writer and editor in the Washington, D.C., market as well as at news organizations in New York, Michigan and California. Bob joined Kiplinger in 2016, bringing a wealth of expertise covering retail, entertainment, and money-saving trends and topics. He was one of the first journalists at a daily news organization to aggressively cover retail as a specialty and has been lauded in the retail industry for his expertise. Bob has also been an adjunct and associate professor of print, online and visual journalism at Syracuse University and Ithaca College. He has a master’s degree from Syracuse University’s S.I. Newhouse School of Public Communications and a bachelor’s degree in communications and theater from Hope College.