What Does the Sears Chapter 11 Bankruptcy Filing Mean for Your Average Consumer?
Sears has already announced the closure of 142 stores
Sears, once one of the great American brands, has finally succumbed to the 21st century economy. With competition from giants like Amazon.com and Walmart, its death was almost a certainty for years. But now that Sears has filed for Chapter 11 bankruptcy protection, what does it mean for consumers?
It's a great time to get some good deals
When a company files for bankruptcy protection, it's always bittersweet. When a backbone of the American economy goes away, and with it a lot of good jobs, consumers can benefit with a lot of really good liquidation sales.
Before the company reorganizes and comes out the other side of the tunnel as a (hopefully) profitable company, it has to trim away the fat. Sears has already announced it will close 142 stores in an effort to do just that. It's at those stores when consumers can expect to come out on top.
You can expect the discounts to get deeper as we get closer to the day those stores close for good. But by then the best merchandise will be gone. If you have been waiting for the right time to make a certain purchase, now might be time to consider it. You may be able to get a pretty good discount. But if you wait for too long, you might find yourself picking over bare shelves.
If you have any Sears or Kmart gift cards, spend them now. Don't wait until inventory is extremely low and you can't find anything to buy. If you forget about those gift cards and a new Sears emerges on the other end, you'll find yourself with a hunk of plastic worth absolutely nothing. Stores will often only honor gift cards up to a certain time before they close or reorganize, and sometimes at a reduced percentage of their original value after a certain date.
Sears has previously said that he plans to honor its warranties, but don't necessarily think that this will be the case forever. Far too often the best intentions are run over by real world economics. While the company may plan to honor a warranty, it might not be financially able to do so or do so for very long. It's also possible that the company could dissolve instead of reorganizing, which could leave you without a warranty.
But that shouldn't steer you away from making a purchase if it's a really good deal. Most of the time you won't need to use the warranty, anyway.
If you have an item currently covered under warranty and you need warranty repairs, schedule them now. You don't want to wait until you find that the company can no longer offer warranty repairs.
Buying Appliances: special considerations
As we mentioned, now is a great time to get liquidation sales. And the sales will only get better. But if you are ordering an appliance, you should think things through thoroughly before you make a purchase.
If your appliance is in stock and you are taking it home with you, there shouldn't be any problem. The only thing you might potentially have to worry about is whether or not you will need warranty repairs in the future and whether warranty service will be available, as we discussed previously. If it will take a while for the item to get to you or if the item is on backorder, there's a chance you won't get it.
Consider Cancelling items on backorder
If you have an item that is currently backordered, you might consider canceling that order just in case the company is not able to deliver on his promises and leaves you high and dry. If you aren't willing to cancel the order, you should be alright if you paid with a credit card. That way if there is a problem getting your item you can always file a dispute with your card issuer.
Other stores may fight for your business
While it's not guaranteed, you might see some good deals at other retail giants, who will be competing for the customers shut out of Sears and Kmart. Other stores are expecting to see sales growth as Sears moves further along in the bankruptcy process. Many of them, especially those who are close to the closing stores, may offer certain specials in order to entice once loyal Sears and Kmart shoppers.