Consumer Publications List
a Store Goes Out of Business
A woman ordered
a dining room set from a department store, and paid $900. When she called to see
if the furniture had arrived, she found out the store had filed for bankruptcy.
The store said it could not get the furniture for her, or a refund. The only
thing it offered was a voucher for other merchandise in the store, none of which
When a store shuts
down, consumers can get hurt. They can lose their deposits on ordered
merchandise, or the money they've paid into a layaway agreement. Gift
certificates or store credit may become worthless. "Going out of business" sales
sometimes don't offer the bargains they promise.
How to Contact a
Closed BusinessWhen a department store or a chain of stores closes, you
usually hear about it in the news. The store may remain open for a certain
period of time, having a "going out of business" sale. It may still have people
to answer the phone and explain what customers who are owed merchandise or
deposits should do.
businesses such as dry cleaners and repair shops sometimes close without
warning. Customers arrive to pick up their clothes or other items and see a dark
store with a sign that reads "Closed" or "Out of Business." In this case, how
does a consumer contact the owners to retrieve items or get a deposit
First, see if the
store posted any instructions for customers. If not, ask nearby shops if they
know how you could contact the owner. The landlord who owns the building, retail
strip or mall may also have that information.
If that doesn't
work, check with the Post Office to see if the company has a forwarding address.
You can check with the county clerk's office to find out the names and addresses
of the "principals" (owners and officers) of the business. Also, the Better
Business Bureau or the Attorney General's Consumer Protection Division may have
information about the business and what happened to it.
When the Store
Owes You Money or MerchandiseClosing the business does not relieve the
owner of his or her obligation to you. Many stores try their best to provide the
merchandise promised to customers who placed orders and made deposits. Talk with
the store's owner about what can be done.
If the store has
filed for bankruptcy, you should file a claim with the U.S. Bankruptcy Court
where the business filed for bankruptcy. You will be one of many creditors who
are owed money by the store. Unfortunately, if the store has filed for
bankruptcy, it's unlikely it has the money to repay all its creditors, so you
may receive only some, or none, of your deposit. However, it is still wise to
file a claim.
If the store has
not filed for bankruptcy, you can take the business to court, but collecting a
judgment can be very difficult, time-consuming, and expensive.
If you paid for
your merchandise by credit card, you can request a refund of your deposit from
the credit card issuer. The procedures to request a "chargeback" are explained
on the back of your credit card statements.
by Paying Small DepositsWhen you order merchandise that will be
delivered in the future, such as furniture or a bridal gown, a store usually
asks for a deposit. However, there's no law governing how much of a deposit–if
any–you must pay. Always ask the retailer what is the minimum deposit it will
deposit by paying it with a credit card. Laws regulating credit card issuers
provide you with safeguards if the business fails to deliver the
If a Store
Closes with Your Item InsideIf a store closes with something of yours
inside, such as an appliance brought in for repair, or clothing that was to have
been dry-cleaned, try contacting the owner. If that doesn't work, contact the
Consumer Protection Division.
Going Out of
Business SalesYou may be able to pick up some good bargains at a "going
out of business" sale. But sometimes, the only "bargains" are on shoddy
merchandise improperly brought in by a liquidation company hired to take over
the operation of the close-out.
provides that a "going out of business" sale can last no more than 60 days. This
law covers all sales at store locations discontinuing their operation, including
close-out sales, liquidation sales, or lost-our-lease sales. The store must take
inventory of all the items to be sold, and the retailer cannot restock the
shelves with new merchandise for the purpose of the sale. However, a Bankruptcy
Court may sometimes allow store to bring in new merchandise or conduct a sale
for more than 60 days.
• Check the
merchandise to make sure it's the same quality as merchandise you've bought at
the store previously.
• Don't assume
you're getting bargain prices. Comparison shop elsewhere to be sure. Some
businesses have increased the prices on items sharply just before the sale, so
they could then mark them down and claim that they were offering huge
• Ask about the
refund policy. Often all sales will be final, or only exchanges will be allowed.
Therefore, examine what you want to buy carefully for signs of damage, and make
sure copies of any warranties are included.
• Ask about service
after the sale. Read warranties to see if there are other places you can take
the item for repair or service if needed.
Maryland Attorney General's Consumer Protection
DivisionConsumer hotline: (410) 528-8662 or 1 (888) 743-0023 toll-free
200 St. Paul Place, Baltimore, MD 21202
410-576-6300 / 1-888-743-0023 toll-free / TDD: 410-576-6372