Consumers left with worthless passes and gift cards following COVID-19 business closures

The pandemic has hurt a number of Canadian businesses — some to the point of no return — but consumers have also not gone unscathed.

Brenda Mihalicz of Carstairs, Alberta bought season passes for her nephews to Shakers Fun Centre in Calgary last Christmas. The centre then closed in early March due to COVID-19 and it never reopened again.

A notice on the company’s website stated due to the pandemic as well as the economy, it would be closing permanently. It advised season pass holders to go to its website for a refund.

“When you went to Shakers website, there was a statement stating we are closing, please follow through with the procedure to request a refund, Mihalicz said. “So that’s what I did.”

She got an email back saying her request had been received, but weeks later she still hadn’t gotten her money and the website has been shut down.

“Their website was completely gone. Like it never existed.”

Global News tracked down the centre’s founder and owner, Christine Buhr, who told us in an email: “The process is taking a bit longer than we hoped. Some (refunds) have been issued, the outstanding will be issued as soon as we can.”

Buhr added the website had been up and running for two full months — after the doors closed.

“We’re committed to closing our business honourably,” she said. “We’ve made an honest, good-faith effort to refund everyone.”

Alex Don is a lawyer and president of the newly formed National Canadian Lawyers’ Initiative (NCLI). It’s a network of more than 400 lawyers and law students available to provide free legal advice to Canadians impacted by COVID-19.

He told Global News there isn’t much consumers can do when it comes to actual bankruptcy or insolvency situations.

“There’s literally what we, in the legal field, call a waterfall of creditors,” Don said. “So there are priority claims, then there are secured claims and then are unsecured claims.”

Don said if a business has simply closed its doors, but not filed for bankruptcy or insolvency, it’s still on the hook for any liabilities. If it has filed, he said it’s tough for consumers to get any money back — but not impossible.

“One thing a consumer can do is check with their bank or credit card used. There’s a possibility to dispute the transaction due to failure to receive goods or services.”

Don also suggested consumers go on the Government of Canada website to find out more details about the bankruptcy filing, as well as the Office of the Superintendent of Bankruptcy.

Global News also reached out to Service Alberta. A spokesperson told us the COVID-19 pandemic has been very difficult on businesses and their customers.

“Alberta consumers who have gift cards, store credit, warranties, or loyalty points from a business that has permanently closed due to the pandemic are encouraged to contact the company — or those involved with discharging it — about the products the consumer holds.”

It went on to say if a company has filed for bankruptcy, provincial laws may no longer address the issues consumers may encounter in the aftermath.

Don said legal action is an option, but consumers should consider if it is worth it.

“It would really depend on how much you are holding on a gift card,” he said. “If you have $20 on a gift card, I wouldn’t recommend starting legal proceedings.”

Global News connected Mihalicz with Shakers to help facilitate her refund. At first, she was told they couldn’t find her request, but eventually she got her $87 back.

Still, she said it shouldn’t have come to this.

“I don’t think any clientele should even have to request a refund because you know who the season pass holders are,” she added.

“You should have easy access to your billing and refund your clientele. Easy peasy.”

Shakers has once again put a up notice online advising pass holders how to access a refund.

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