Canadian consumers holding Toys "R" Us gift cards have officially run out of time to redeem their value, as the troubled retailer has ceased accepting all gift card transactions following a court-mandated deadline. The cutoff marks a significant development in the company's ongoing financial struggles and creditor protection proceedings.
Court-Approved Deadline Passes
The retailer officially stopped honoring gift cards after Monday, February 16, 2026, following a judge-approved 14-day period that allowed customers a final window to use their remaining balances. This deadline was directly tied to the company's creditor protection proceedings, which have exposed the retailer's substantial financial challenges.
Substantial Unredeemed Value
Court documents reveal the staggering scale of unredeemed gift card value, with the company reporting more than $36 million in outstanding gift card obligations at the time of filing for creditor protection. This massive liability represents significant losses for Canadian consumers who purchased these cards, often as gifts for children and families.
Frustrating Timing for Shoppers
The timing of the cutoff added particular frustration for many consumers, as Monday fell on a statutory holiday in several provinces including Saskatchewan, Ontario, Alberta, British Columbia and New Brunswick. This meant that customers in these regions had limited opportunities to make final purchases before the deadline took effect.
Adding to the inconvenience, Toys "R" Us Canada had previously paused all e-commerce sales while working on a website overhaul. With online shopping unavailable, customers were forced to make their final gift card purchases in-person at remaining retail locations, creating additional barriers for those hoping to redeem their balances.
Shrinking Retail Presence
The company's retail footprint has dramatically contracted in recent years, with only 22 stores remaining operational across Canada, including one location in Saskatoon. This represents a significant reduction from previous years, as the retailer has closed 53 stores over the past two years as part of aggressive cost-cutting measures.
Court documents indicate that the judge overseeing the creditor protection case has granted permission for Toys "R" Us Canada to liquidate additional stores if lease negotiations with landlords fail, suggesting further contraction may be imminent.
Mounting Financial Pressures
The gift card cutoff comes as Toys "R" Us Canada faces multiple financial challenges, including:
- Significant debts totaling at least $120 million to vendors
- Substantial unpaid rent obligations to landlords
- Multiple legal disputes related to unpaid rent
- Ongoing creditor protection proceedings
Ownership and Business Model
The toy retailer is currently owned by Putman Investments, a private equity firm based in Ancaster, Ontario. Putman purchased Toys "R" Us Canada and Babies "R" Us from Fairfax Financial Holdings Ltd. in 2021, continuing its pattern of acquiring struggling retail brands.
The firm has developed a reputation for purchasing distressed retail operations, with previous acquisitions including Sunrise Records, HMV, Northern Reflections, Ricki's and Cleo. Notably, Ricki's and Cleo closed all their retail locations last year, raising questions about Putman's ability to turn around struggling brands.
Broader Implications for Retail
The situation highlights the risks consumers face when purchasing gift cards from retailers experiencing financial difficulties. While creditor protection proceedings provided a brief window for redemption, the ultimate cutoff leaves many consumers with worthless plastic and serves as a cautionary tale for gift card purchases during uncertain economic times.
The company's struggles also reflect broader challenges in the retail sector, particularly for brick-and-mortar stores facing increased competition from online retailers and changing consumer shopping habits. As Toys "R" Us Canada continues its restructuring efforts, the future of one of Canada's most iconic toy retailers remains uncertain.
