Riverview father Rudy Walters is speaking out after Mastermind Toys stopped accepting gift cards effective Christmas Day — with signs posted on their storefronts only days before.
Walters said the move raises questions about the value of gift cards and about consumer protection when a company such as Mastermind Toys heads toward bankruptcy.
“I would just like to see some more legal protection for consumers to make sure that hard earned money that’s spent on gift cards can be used at any time that company is still in existence,” Walters said.
The move is a part of the retailer’s recent filing for creditor protection amid increasing competition, COVID-19-related disruptions and a decrease in customer spending. The decision to not honour gift cards is, according to the notices on the stores, “pursuant to the CCAA court process.”
Rudy Walters says he would like to see more protections for consumers with gift cards. (Rudy Walters/Facebook)
“The first thing that came to mind is the cost of living right now is so high. Families are struggling and to get somebody a $25 or $50 gift card and then find out that it’s no longer that high, that has to absolutely sting,” he said.
According to CCAA court documents, the company currently has “approximately $5.6 million in outstanding gift card liabilities.”
Walters said the timing is also poor.
“Especially to have that deadline be Dec. 24, knowing how many families would be only opening up gift cards on the 25th,” Walters said.
“How many of these gift cards would possibly still be in transit with Canada Post or another carrier?”
Mastermind Toys filed for creditor protection amid increasing competition, COVID-19 related disruptions and a decrease in customer spending. They reached a deal to sell the bulk of the business to Unity Acquisitions. (Roger Cosman/CBC News)
Fredericton lawyer Romain Viel, who works in commercial litigation, said the decision to invalidate gift cards is recommended by insolvency professionals and approved by courts to provide businesses a chance to organize their financial affairs.
“Generally, if you’re in insolvency proceedings it’s because the money going out is more significant than the money coming in,” Viel said.
“So by freezing gift card liabilities, it gives the business an opportunity to reorganize itself financially, pay off key creditors, so that, for example, the bank doesn’t come in and foreclose on its properties or take over leases,” he said.
The result is that creditors getting paid first, with gift card holders falling in second place. This leaves consumers with gift cards hanging in the lurch.
Few protections for gift card holders
Earlier in the month, the retailer reached a deal to sell the bulk of its business to Unity Acquisitions, a company run by Joe Mimran, Frank Rocchetti and David Lui.
While the deal is expected to close in January, in previous statements to CBC News, company spokesperson David Ryan said he could not confirm if gift cards would be accepted again once that happens.
Viel said there is nothing that says gift cards have to be respected once the deal is closed.
Romain Viel says there’s nothing that says gift cards have to be respected once the deal is closed other than the potential of a further court order. (Nipun Tiwari / CBC News)
“The way it stands now is that without a further court order, the gift cards do not have to be respected,” he said.
“So when the sales process is finally approved, there may be another court order” to deal specifically with gift cards.
In New Brunswick, expiration dates on gift cards are prohibited by the province’s Financial and Consumer Services Commissions’ Gift Card Act. There are some exceptions, such as gift cards for a specific good or service — like a gift card for a manicure, for example — promotional gift cards or cards offered for charitable services.
Are gift cards worth the risk?
Much like Walters, who himself tries to stay away from gift cards, Viel said gift cards are a risk as there is always a chance that a company could face financial challenges, especially with inflationary pressures and the economic effects of COVID-19.
“It’s a risk to buy gift cards,” said Viel.
“There’s always going to be that [chance] who you’re dealing with may or may not be around in a year or two,” he said.
While he thinks there is strong consumer protection in the province, Viel said without more targeted gift card legislation in bankruptcy circumstances, “gift card holders are kind of stuck.”
“Obviously, if I were to find a Sears gift card in my dresser right now, I’d know that would have absolutely no value,” said Walters.
But with a Mastermind gift card,”if I’m able to go there and spend my money, I should be able to go there and spend a gift card as well,” he said.
Mastermind is currently slated to close 18 of its 66 stores — nine in Ontario, four in Alberta, and one each in B.C., Nova Scotia and Manitoba.
In New Brunswick, the stores in Fredericton and Saint John will close on Jan. 7 and Jan. 10 respectively.
Mastermind Toys, which has been operating since 1983, did not respond to requests for comment or interview.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
