Millions of Canadians are members of the Hudson’s Bay loyalty points program.
And now the future of those points is in jeopardy.
“It’s a big loyalty program,” Bruce Winder, a retail analyst told Global News. “I believe it has $58 million of liabilities on it.”
“I think honestly what’s going to happen is people are just going to lose their points.”
Canada’s oldest company, Hudson’s Bay, could soon permanently close its doors to customers as it runs out of business more than 350 years after it began.
Financial struggles in an ever-changing retail landscape have pushed the company to the brink as it awaits court approval to liquidate all of its stores across the country.
The case is still being considered by the Ontario Superior Court. If approved, a store-by-store liquidation process could begin as early as this week, Hudson’s Bay Company says.
Now, customers are unable to redeem or earn points as the program is paused.
Winder said he can’t see a situation where Hudson’s Bay could honour everyone’s points unless it receives some financing before May 1.
“People who follow retail knew that this day was going to come sooner rather than later,” he added.
“They hadn’t been paying landlords for a while. They hadn’t been paying suppliers for a long time. Those are sure signs that a company is struggling financially. And when that happens, usually, not always, but usually there’s trouble and I knew that, you know, perhaps their days were numbered in terms of for the loyalty program holders.”
Winder said he is not aware of any warnings issued to points holders, but everything happened quickly.
“It’s a massive loyalty program,” he added.
“It’s been around forever. It’s one of the, it was one of the best at one time in Canada, not for a while, but you know, and I think it’s a bit of a lesson. This is a lesson for consumers. If you have points, spend them, use them. You know, Don’t hoard them, because you may wake up one day and those points are worth nothing or you can’t use them.”
Winder said he assumes that points holders are unsecured creditors, meaning they are last to get any money back if The Bay is sold, or sold off in parts.
If someone has a gift card, they can still use it at The Bay until April 6.
“That’s not much solace to the folks who have all the points, though,” Winder said.
— with files from Saba Aziz