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Holiday Shopping Tip: GameStop Closures

Posted in bankruptcy, best practices, botch, business, retail, video gaming by commorancy on December 9, 2019

GameStopLiquidationBeware of shopping at GameStop during the 2019 holiday season. Like the Toys R Us closure shopping tips I wrote during the 2018 Toys R Us closure, this same set of rules now applies to GameStop. GameStop presently plans to close at least 200 stores this year alone, and who knows how many more stores will close in 2020?  *shrug* They could end up closing all stores under bankruptcy. You should proceed with your holiday shopping as if GameStop is completely closing every store. After all, they very likely will completely close based on how quickly these closures have been coming. You also don’t know if they will close the store where you plan to purchase your items. As a consumer shopping tip, let this be a warning to not shop stores under imminent closure. Let’s explore.

Store Closures

GameStop is now proceeding with many store closures during this 2019 holiday season. Why is this important to you? Because if you’re a regular customer there, you will need to reconsider ANY holiday shopping at this chain. Let’s highlight a few problems with shopping at stores where threat of closure is imminent.

Even if your local GameStop doesn’t yet know about its own closure, that doesn’t mean that that store won’t be closed just a week or two later. Let’s understand the very real dangers of buying from a chain under imminent threat of closure… particularly during the ever important holiday shopping season. Don’t get duped by this company. There are also too many other stores where this holiday video game shopping problem doesn’t exist.

  1. Returns — Buying even a week before the store puts up a “Store Liquidation” banner may invalidate your ability to return a purchased item to that (or any) store if your item is defective. GameStop isn’t a store known for its ethical business practices already. Because you purchased that item from a store targeted for closure, any sales you made there may end up becoming “All Sales Final”. Will other stores honor that closed store’s receipt? That’s questionable. Again, GameStop isn’t the most ethical store chain out there. Corporate could tell all other stores which remain open to reject returns from stores which are in the process of closing or have already closed.
  2. Game Reserves — GameStop allows consumers to place “money down” as a deposit to hold a game (or other merchandise) until it finally arrives for sale. If you have any money reserved for any upcoming games or any other items, you will need to head over to the store and ask for a refund of that money as quickly as you possibly can. You should insist on having that money returned in the form of cash or as a refund to your credit card. Do not fall for allowing the staff to place the money onto a gift card. I’ll discuss the reasons why Gift Cards are a bad idea next. If you have any $5, $10 or $25 reserves left standing, you will lose that money when the store closes. They will not transfer that money to another store or refund it to you after closure. Even still, you DO NOT want to request a transfer of your reserves to another store as that other store could also close. Request your reserve deposits to be returned to you in cash, never on a store card.
  3. Store Gift Cards — Proceed here as if the whole GameStop chain is closing. DO NOT purchase any gift cards from GameStop at this time. When stores begin closing, they tend to no longer honor ANY locally purchased gift cards or indeed honor any money left on gift cards. Laws in some states may still require GameStop to honor cards as long as even 1 outlet remains open. However, that may mean you might need to travel hundreds of miles to redeem it. Though, you may or may not be able to redeem it on GameStop.com. If you have any remaining store gift card credit for GameStop, you need to run, don’t walk, to your nearest GameStop which is still open and use it up on purchasing anything in that store, assuming they haven’t yet invalidated gift cards. This is a situation of use-it-or-lose it. Note that store credit can also be placed onto GameStop’s PowerUp loyalty card. So be sure to double check that no credit remains on that card either. Again, proceed here as if the chain is closing. Don’t risk your money on GameStop store gift cards.
  4. Gift Purchases — Don’t consider purchasing any merchandise from GameStop which will be used as a gift unless you are absolutely certain that you fully understand that neither you nor the gift receiver WILL be able to return that item to GameStop once that local store closes (and it probably will). When purchasing a gift for someone else, you’ll want to ensure they can return that gift to a retailer for replacement or refund. Choose a retailer that still plans on being in business January 1 of next year.
  5. GameStop Rewards Points — As with any store that starts store closure proceedings (a precursor to bankruptcy), one of the first things that is dumped is loyalty cards and point programs. As of now, GameStop has not yet fully disbanded or dumped its loyalty card program, but they have recently reduced it. If you have any remaining points, you will need to use them up pronto by using the Rewards app to convert points into store credit and using that store credit as fast as you can. You can’t ask for rewards points be converted to cash, but you can use these points towards in-store merchandise. Again, this is a use-it-or-lose it situation. Proceed as if ALL of GameStop is closing and use up any remaining rewards points you have outstanding in your rewards account. It’s very likely this rewards program will be cancelled soon, so do this as fast as you read this article. As of this article, GameStop’s rewards system is still functioning (Dec 8, 2019).
  6. In-Store Warranties — Do not purchase ANY GameStop store warranties (or any other store chain’s store warranty) when under threat of closure. If you presently own an in-store warranty with GameStop, you may want to call your local GameStop to inquire how future service will be handled if your store closes. But, be fully prepared to have the manager not give you all the information you need. If the warranty you’ve purchased is through a third party, like SquareTrade, these warranties should remain in effect until they expire. However, any warranties sold and honored solely by GameStop are likely to become null-and-void after closure. You shouldn’t rely on what a manager tells you about its current store warranty programs as they may not have all information about GameStop’s full store closure plans.
  7. Disc Replacement Plan — This is GameStop’s own in-store disc warranty plan. They allow one replacement per plan. If you have any games under this plan, you should take advantage of this plan and replace your discs. This plan is very likely to not be honored after the store closes… not even by stores that remain open. You may also find that stores that remain open are too far away to take advantage. If you buy a game from GameStop and are offered this in-store plan, refuse it. It’s a waste of money for a store chain under threat of closure.
  8. Defective Items — If you have any purchases you’ve already made with GameStop and you intend to return defective items, do it now. Don’t wait. You should also call the store where you plan to return to make sure they are not already in liquidation closure. If they are already liquidating, they have likely suspended returns. You will then need to locate another store location that isn’t presently under closure to return your item. Be quick, though. That store might get the word to close down at any time.

Store Liquidations

In concert with the above, you may be able to pick up a marked-down deal or two in your local store if it is closing. However, proceed with caution here. Know that whatever you purchase is likely “All Sales Final”. It may even say that on the receipt. If it does, you WILL NOT be able to return any purchased items to this or any other store that remains open.

If you intend shopping for holiday gift giving during a liquidation sale, I strongly recommend not. Unless you know the person receiving the gift never returns items, it is never a smart choice to shop store liquidations for holiday gift giving. The person receiving the gift will likely not be able to return the item to the store. However, if it’s a video game system, you may be able to get warranty work performed through the manufacturer (or SquareTrade if you bought such a plan).

Clothing and apparel items, while also not returnable, are likely safe choices during a liquidation if these items are for your own personal use. However, again, when purchasing for gift giving, you need to make sure that the person you’re planning on gifting the item to understands that they cannot return the item to a store which has since closed. I’ve said this several times throughout this article, but it’s always worth saying again. Choose gift giving items carefully and from stores that plan to remain in business.

GameStop Closing

It is as yet unknown how many stores will ultimately close. It is also unknown if GameStop will honor returns in any stores that remain open on behalf of the closed stores that sold that merchandise. As I said, GameStop’s ethics and business practices have always been questionable at best. GameStop is not required to honor receipts for merchandise sold in now closed stores. Be cautious when doing business with GameStop throughout the holiday season for this reason alone.

You should proceed with your holiday purchases as if the entirety of GameStop is closing. Better, don’t even shop there. However, if you have store credit, gift cards or rewards coming to you, you will want to use that store credit up as fast as possible. Know, though, that anything you purchase may not be returnable.

If you want to give a gift card to someone that could be used at GameStop, you should buy a Visa, MasterCard or American Express branded card where that credit can be used at any store that accepts these credit cards. Do not buy a GameStop store gift card as the store may not exist by the time the person gets around to using the card and other stores may not honor that gift card’s credit.

GameStop Exclusive Items

Here’s the one and only one place where I recommend purchasing items from stores which are closing. GameStop has exclusive controllers and toys. Because these exclusives only exist at GameStop, you’ll want to quickly get there and buy those exclusives. Once this chain closes, it may be difficult to locate these exclusives again. You won’t be able to return these items, but you also won’t be able to find them after the stores are closed. GameStop exclusives are really the only investments that are worth the purchase during store liquidation sales.

Laws and Closures

While there are laws about how retail business must act while in business, once a business begins closing locations, some of these laws become murky. For example, one such murky situation is Gift Cards. When you buy a store gift card and a store goes bankrupt, you become an unsecured creditor to the company’s bankruptcy proceedings behind shareholders. This means that if any money is forthcoming from bankruptcy liquidation, it will be distributed to those ahead of unsecured creditors first. What that ultimately means is that gift card holders likely won’t see any money back.

Instead, if you have a gift card to a store in imminent danger of closure or bankruptcy, you should immediately head to the store and use that gift card while they still honor them. Don’t wait on this one.

GameStop hasn’t announced any bankruptcy proceedings as yet, but that could still be just a matter of time. Right now, GameStop is performing self-closures in hope of righting their financially listing ship. That doesn’t mean that closing these stores will ultimately succeed in this goal, but that’s their hope. Cutting out stores immediately cuts their losses, but may cost them money in paying out long term leases for stores which close. These lease payouts may push the chain over the top towards full bankruptcy.

Duping Holiday Shoppers

It is rumored that GameStop’s holiday store closure game plan is to rope in as many unsuspecting holiday sales while the remaining stores remain open. Yet, when January 1 rolls around, it seems this chain plans to have a massive set of store closures. This action alone will thwart holiday returns. This means that you may literally be left holding your holiday bag from GameStop. Once stores close for good on December 31st, it typically means that this chain was simply in it to dupe consumers out of their holiday money without any possibility for returns.

Don’t get suckered in by GameStop’s less than ethical business practices. Choose to shop for your gaming needs at stores without imminent closures, such as Walmart, Target, Best Buy and Amazon. At least with these latter stores, they will remain in business come January 1 allowing you to return any items that are defective or were simply awful holiday gifts.

Best Judgement

When a store chain begins closing down stores, it’s always worth using your best judgement. Most of what I have written above is pretty much shopping common sense, IF you know that stores are closing. For those oblivious to the woes of a chain not in the best of financial condition, this may be a wake-up call and warning.

When a store chain is under threat of closure, you should always heed this same exact advice as above. Avoid buying from the chain, if at all possible. During the holiday season, it can be tempting to visit any store because you may be having trouble finding a video gaming item. Don’t be temped. Choose Best Buy, Amazon, Target or Walmart before heading to a GameStop. Nothing is more disheartening than gifting an item to someone only to realize that it was the wrong item and it can’t be returned.

While heeding this consumer advice won’t help GameStop turn itself around, they brought this situation on themselves (which is a rant for another day). When stores begin to close, you lose your ability to exercise certain fundamental store rights (like store returns, gift cards, loyalty programs and so on). Once a chain begins to have financial troubles, it’s usually a downward spiral that doesn’t end. Not shopping there helps them fail faster, but it’s better to be safe with your holiday dollars than throw it away on a store where you have no recourse and no returns.

Good Luck and Happy and Safe Holiday Shopping!

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