Toys 'R' Us Customers Face Gift Card Redemption Challenges Amid Widespread Store Closures
Canadian consumers holding Toys "R" Us gift cards are encountering significant obstacles in redeeming their balances as the iconic toy retailer undergoes substantial restructuring. With the company recently seeking creditor protection while grappling with approximately $160 million in debt, customers have limited options to utilize their gift cards before the impending deadline.
Limited Physical Locations and Frozen Online Platform
The situation has become particularly challenging following the closure of 57 stores across Canada over the past year, leaving entire provinces without a single Toys "R" Us location. Currently, only 22 physical stores remain operational nationwide, creating accessibility issues for many customers. The retailer's online shopping platform has been inactive for several weeks, further restricting redemption opportunities.
According to court documents, Toys "R" Us is authorized to continue accepting gift cards until at least February 16, 2026. However, with the majority of physical locations shuttered and the e-commerce site unavailable, consumers face practical limitations in utilizing their stored value.
Geographic Accessibility Concerns
Alex Hennick, president of Toronto-based Hennick and Associates—a company specializing in asset liquidation for struggling businesses—highlighted the geographic challenges facing gift card holders. "I'm not sure what inventory is left, but you would have to be close to a location to use a gift card. And if not, basically, you're kind of out of luck," Hennick explained, noting his firm is not involved in the Toys "R" Us restructuring process.
The remaining store locations are concentrated in specific regions, with Western Canada seeing particular reductions. The chain closed its final British Columbia location in January 2026, leaving only scattered stores in:
- Saskatoon
- Regina
- Lethbridge
- Edmonton
Broader Retail Industry Context
This situation reflects a broader trend in the Canadian retail sector, where multiple companies have recently sought creditor protection while carrying significant gift card obligations. Since January 2025, at least five other retail businesses have filed for protection under the Companies' Creditors Arrangement Act, collectively holding over $26.5 million in gift card liabilities.
The affected retailers include:
- Cleo
- Ricki's
- Bootlegger (all owned by Comark Holdings Inc.)
- Hudson's Bay Co.
- Claire's
Interestingly, Doug Putman—the current owner of Toys "R" Us Canada—previously acquired Ricki's and Cleo for $12.8 million, demonstrating interconnected challenges within the retail landscape.
Restructuring Processes and Consumer Implications
Court records reveal that professional services firm Alvarez and Marsal has been involved in restructuring multiple failed retailers, including Toys "R" Us. As court-appointed monitor, the firm assumes operational control during restructuring proceedings to maintain business continuity.
Each company undergoing restructuring has established varying timeframes for continuing to accept gift cards and honor loyalty programs. Comark offered the shortest redemption window, providing customers just one week following their restructuring filing to use gift cards at Cleo, Bootlegger, or Ricki's locations.
The Toys "R" Us situation underscores the vulnerability of gift card holders during corporate restructuring, with approximately $36 million in gift card value currently at stake. As the February 16 deadline approaches, consumers face increasing pressure to locate remaining stores or risk forfeiting their balances entirely.
