ALBANY – On the heels of swirling reports concerning the future of retailer Toys R Us, U.S. Senator Charles Schumer announced Wednesday that he is urging the Federal Trade Commission (FTC) to step in amidst very real and serious concerns for the company’s longevity, particularly as it relates to gift cards purchased by consumers.

Schumer is asking the FTC to take an immediate look into the company to ensure no laws are being violated as a rumored liquidation process ensues, and most importantly, to ensure consumers have time to get cash back for unused gift cards. Schumer also urged the FTC to publish consumer education around the difficulties surrounding gift card redemption once a retailer enters bankruptcy.

“With the entire Toys R Us operation at risk of shutting its doors for good, I am urging the company to redeem outstanding gift cards for cash so they are not as worthless and unwanted as a lump of coal in a stocking,” said U.S. Senator Charles Schumer.

"This past holiday season, buoyed by fresh debt financing, Toys R Us gave an ‘all clear’ to consumers, selling toys and gift cards as part of normal operations. However, it appears the music is about to stop for the iconic retailer and consumers could be left in the lurch when it comes to the loss of a whole lot of money in unspent gift cards. It would be a sad toy story if those same consumers got gamed by a Toys R Us closure and left holding useless gift cards that were intended to bring a smile to the face of a child.

That is why it is critical for the FTC to take an immediate look at how the company is handling this unique situation and determine just how many gift cards are out there. Consumers deserve the chance to turn their Toys R Us gift cards into cash before it is too late and the FTC can help ensure any laws to help this happen are being followed in real time.”

Schumer, Wednesday, noted public reports that showed prior to the holiday season, Toys R Us acquired Debtor In Possession (DIP) financing that carried the company through the holiday season, allowing them to remain open and sell toys and gift cards. However, that financing soon ran out and required another influx of cash the company has not been able to secure. Schumer said the latest developments spell trouble for consumers who may have just purchased gift cards and are now faced with the prospects of losing out on the value of their investment.

“While many are fond of and share great memories inside these stores, you don’t need to have the neck of a giraffe to see that Toys R Us is having issues that could translate into money losses for innocent consumers. That’s what we want to head off at the pass by urging forthright planning,” Schumer added.

Moreover, it was Schumer who championed the law that protected consumers from expiring gift cards in the first place. Schumer was an early supporter and original cosponsor of the Credit CARD Act of 2009, which created new protections for gift card users to prevent a number of frequently used abuses, including hidden fees, vague terms of service, and early expiration dates. Under the rule, gift cards must be good for at least (5) years after their purchase. Schumer, today, said that he has called on the FTC to closely and expeditiously review the situation because all signs point to ominous when it comes to Toys R Us being operable five years from now, and consumers holding gift cards deserve the opportunity to rectify their gift card purchases with the company before it is too late.

– Submitted by the Office of Senator Schumer