Time might be running out to use your Hudson’s Bay gift card. Canada’s oldest retailer has filed for creditor protection as it restructures its business, leaving experts urging shoppers to spend their remaining balances before it’s too late.
Hudson’s Bay Company, which owns Hudson’s Bay stores and TheBay.com, has filed for creditor protection under the Companies’ Creditors Arrangement Act (CCAA). The decision was made after the company explored other options with its legal and financial advisors.
This decision highlights a broader issue facing Canadian retailers. Business and Law Professor at Toronto Metropolitan University, Daniel Tsai, told Now Toronto that the traditional department store model is no longer effective in Canada, as online retailers, like Amazon, continue to dominate the commerce landscape.
With the company undergoing restructuring, a critical question remains: What will happen to the outstanding balances on Hudson’s Bay gift cards?
In a court filing, Hudson’s Bay confirmed it will work with third-party gift card providers to honour outstanding gift cards at continuing locations. As of February 1, 2025, Canadian customers had gift cards worth a total value of approximately $24 million.
However, there are risks involved for those holding onto gift cards.
Tsai explained that gift cards are unsecured assets, which means they can be easily lost during the company’s asset liquidation process. He advises customers to use their balances while they still can.
“It’s a huge risk, and they’re almost certain to lose everything on their gift card,” Tsai said. “So, play it smart, use them up now, while you still can.”
Amidst the financial turmoil, Hudson’s Bay remains committed to its legacy.
“Hudson’s Bay has been a vital retailer to Canadians for generations, and this decision was made with the best interests of our customers, associates, and partners in mind,” Liz Rodbell, president and CEO of Hudson’s Bay, said in a press release on March 7.
“While very difficult, this is a necessary step to strengthen our foundation and ensure that we remain a significant part of Canada’s retail landscape, despite the sector-wide challenges that have forced other retailers to exit the market. Now more than ever, it is critical that Canadian businesses are protected and positioned to succeed.”
In addition to gift cards, Hudson’s Bay is also pausing its rewards program. The court filing revealed that Hudson’s Bay Rewards will be paused throughout the CCAA proceedings until further notice.
As of February 1, 2025, around eight million Canadian customers held unredeemed points worth approximately $58 million.
While gift cards are at risk, loyalty points have a different value for consumers.
“While loyalty points have a value to consumers for future purchases, consumers did not actually pay money for them; rather, they received the points as an incentive to shop at The Bay. So for points, at least, consumers won’t be out of pocket,” Joanne McNeish, associate professor in marketing management at Toronto Metropolitan University, told Now Toronto in an email on Wednesday.
McNeish added the loyalty program will probably return in some format, but consumers will likely get less for their points.
“I hope The Bay is able to survive. There aren’t many stores like it, and it represents a part of the history of Canada.”
