As we approach the holiday shopping season, consumers are going to have to deal with the bankruptcy of two retail giants – Sears and its co-owned K-Mart.
Some consumers are worried about how that restructuring and bankruptcy will impact them.
When Sears holdings announced its bankruptcy filing, it said that liquidation sales would begin almost immediately.
If you’re looking for a deal, that could be a good thing but experts say you need to be careful what you purchase and how you do it.
Much of the merchandise in Sears and K-Mart stores is under warrantee and for the moment the stores are honoring those warrantees.
But, what happens in the future with things like appliances?
“More than likely, an investor is going to buy the Kenmore brand and if they buy it they are more than likely to honor the warrantee, but you should never take that as a guarantee,” says Matt Oliver, executive director of the North Carolina Consumers Council.
According to the company’s restructuring website, it will continue to honor gift cards but if you have one – don’t wait to use it.
If you buy another brand of appliance at Sears, Consumer Reports says that purchase should be covered under the manufacturer’s warrantee.
“If you have a gift card spend it now,” says Oliver. “You don’t know what will happen in 2-3 months. You may find there’s nothing you can buy or if bankruptcy or restructuring takes effect, you may find there’s absolutely no money on that cards.”
If you have a Sears credit card, Oliver doesn’t recommend closing that account because it will affect your credit score.
With store inventories already low, you might have purchased something that’s out of stock and on back order. Oliver says, be wary of that situation.
“If you’ve made a purchase on something that’s back ordered like an appliance for instance—you and there’s no guarantee it will be delivered before the end of the year—you might want to look at canceling that order,” he said. “You could find once the bankruptcy takes effect, you aren’t guaranteed delivery of a product anymore.”
If you are making any purchase that’s going to be delivered, you should use a credit card because if you don’t get the item you ordered—you have some protection by disputing the charge with the credit card company.