CRANSTON, R.I. (WPRI) - A bankrupt Borders? The bookstore chain is expected to file for Chapter 11 bankruptcy this week, according to the Wall Street Journal -- and if you have a gift card to the retailer, you'll want to use it as soon as possible.
The changing of reading habits, and competition from Internet retailers and handheld book readers -- from Amazon's Kindle to Apple's iPad -- continue to make it hard for traditional bookstores to stay in business. Mom-and-pop bookstores started vanishing years ago; now the big box book retailers are starting to feel the hurt from the poor economy.
Whenever a retailer files for bankruptcy, customers left holding gift cards are often left in the lurch. Declaring bankruptcy means Borders can't pay the creditors and companies it owes money to, so assets are sold off and the money distributed among the creditors. The retailer, or whomever assumes control of the retailer, has the option under Chapter 11 to not honor gift cards.
That means your Christmas gift from Grandma could potentially become a worthless piece of plastic.
It's not like there's a shortage of customers at the Cranston outlet of the chain bookstore. Several customers told Eyewitness News on Monday they're at the store all the time. But some stores might be closed down if they're not making a profit.
"It's kind of a shock, since they're such a big company," said one woman at the Cranston store. "Everywhere has been kind of going under right now."
If and when Borders files for bankruptcy or bankruptcy protection, the actual details on gift cards and whether you can redeem them will be spelled out.
Eyewitness News tried to get a statement from Borders, but the corporation did not send a response or comment by news time Monday night.
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