Joann Retailer Ceases Gift Card Acceptance Amid Bankruptcy Proceedings

Joann, the prominent craft retailer known for its fabrics and crafting supplies, has announced that it will no longer be accepting gift cards as it commences the closure of all its stores. This decision follows the company’s second Chapter 11 bankruptcy filing, which has sparked frustration among its customer base.

Changes in Operations

In a recent statement, Joann disclosed its plan to halt gift card acceptance starting February 28, marking the beginning of the winding down of operations nationwide. The company also stated it would discontinue all personalized discounts, affecting benefits for teachers, military personnel, and health care workers.

Customer Reactions

The abrupt discontinuation of gift card usage has led to disappointment among customers, many of whom voiced their concerns on social media platforms. One customer lamented, “I just want you to know how incredibly upsetting it is that you cut off our ability to use gift cards. Regardless of the fact that you are closing, your business took money and now refuses to give the product in exchange for it. Wrong,” while another expressed distress over the short notice provided.

Legal Implications of Bankruptcy

Under U.S. bankruptcy law, when a retailer like Joann files for bankruptcy, obligations to honor gift cards may be suspended. Individual states have varying regulations regarding gift card consumer protection, meaning that holders of these cards must file claims in bankruptcy court to retrieve their funds. This process can lead to uncertainty as courts decide whether retailers can continue honoring gift cards through specific dates.

Reasons Behind the Closure

Joann’s spokesperson indicated that the decision to close all stores stems from weak consumer demand. After a failed attempt to secure a buyer to keep operations running, Joann officially announced the impending closures of all locations. A company representative stated, “We made every possible effort to pursue a more favorable outcome that would keep the company in business.”

Final Thoughts

This series of developments showcases the challenges faced by retailers in an evolving economic climate. As Joann transitions into this next phase, the impact on both employees and customers is significant, marking the end of an 80-year legacy in the crafting industry.