Joann Inc. Faces Customer Backlash Over Discontinuation of Gift Card Acceptance
Joann Inc., a well-known crafts retailer, has found itself in the midst of a customer uproar following its decision to stop accepting gift cards after February 28. This move comes as the company undergoes a significant restructuring process, having filed for Chapter 11 bankruptcy protection for the second time in less than a year. The decision to halt gift card acceptance has left many customers feeling frustrated and betrayed, as they are no longer able to use the cards they purchased or received as gifts. The retailer, which operates hundreds of stores across the U.S., has been winding down its operations as part of its bankruptcy proceedings.
Joann’s Bankruptcy and Sale Process
Joann first entered Chapter 11 bankruptcy in March 2024, a legal process aimed at restructuring its financial obligations while continuing operations. Earlier this year, the company announced that it had entered Chapter 11 for a second time to facilitate a sale process that would maximize the value of its business. As part of this process, Joann has agreed to sell “substantially all” of its assets to GA Group and its pre-petition term loan agent, which have since taken over ownership of the company. These new owners have initiated going-out-of-business sales at all Joann locations, signaling the final stages of the company’s operations.
The Gift Card Controversy and Customer Outrage
The discontinuation of gift card acceptance has been a major point of contention among Joann’s customers. According to a notice on the company’s restructuring website, gift cards were only accepted through February 28, leaving many customers with unused balances that they can no longer redeem. This decision has sparked widespread frustration, with many taking to social media to express their disappointment. Customers have criticized Joann for accepting money for gift cards and then refusing to honor them, calling the move “unfair” and “highway robbery.” Some have also expressed frustration over the lack of adequate notice regarding the cutoff date, leaving them with little time to use their cards.
Emotional Responses and Calls for Accountability
The backlash on social media has been intense, with customers sharing their personal experiences and grievances. One Instagram user wrote, “It’s incredibly upsetting that you cut off our ability to use gift cards. You took the money but now refuse to give the product in exchange.” Others have echoed similar sentiments, emphasizing the emotional impact of losing access to their gift cards. Many feel that Joann has failed to uphold its end of the bargain, leaving customers financially and emotionally invested in a system that no longer serves them.
Store Operations and the Closing Sales Process
While Joann’s physical stores remain open during the closing sales, customers can only make purchases in person. The company’s website and app are operational but are limited to browsing and checking product availability. The going-out-of-business sales, initiated by the new owners, are expected to last approximately 12 weeks, or until the end of May, depending on inventory levels. This period will mark the final opportunity for customers to shop at Joann before the stores permanently close their doors.
The Financial Background and Implications
Joann’s financial troubles have been ongoing, with the company estimating its assets and liabilities to be in the range of $1 billion to $10 billion in its January bankruptcy filing. The transition to new ownership under GA Group marks a significant shift in the company’s trajectory, as it seeks to address its financial challenges. While the sale process may provide some financial relief, it has come at the cost of customer trust and satisfaction. The gift card controversy has left many questioning the company’s handling of its restructuring and its commitment to its loyal customer base.
