Sears, a longtime top seller of home appliances in the U.S., sold countless warranties. But now that the retail store is filing Chapter 11 bankruptcy and closing another 140 stores, longtime customers remain nervous as they wonder about warranties for all the appliances they bought, as well as Shop Your Way reward points and gift cards.
But Sears says it will honor its warranties.
“We are a leader in the service contracts industry and proudly stand behind our product,” a Sears spokesman told Business Insider last year. “Sears, as well as any other company that legally sells service contracts, is required to meet regulatory requirements designed to provide adequate resources to fulfill service contracts into the future. We will fulfill our commitment to our customers and members.”
However, that’s not what bankruptcy lawyer Corali Lopez-Castro is saying. Lopez-Castro said that there’s a possibility warranties would be dissolved in the event of a Sears bankruptcy.
“The warranties are going to be a huge issue,” Lopez-Castro, a partner at the Florida-based law firm Kozyak Tropin & Throckmorton, told Business Insider. “There’s a real risk that they will not be honored.”
Gift cards and rewards points earned through Sears’ Shop Your Way loyalty program could also be erased.
“I would advise customers to redeem their points now,” Lopez-Castro added.
By: Maytinee Kramer
