If a business suddenly closes, what can consumers do?

When we bring you news of a store that closed, consumers may have questions: What happens if I’m owed a refund or a product? What about gift cards I haven’t used yet?

Read on for expert advice about steps consumers can consider.

CUSTOMERS LOOK FOR ANSWERS

Outside two different Al’s Formal Wear locations during business hours earlier this month, two North Texas consumers told NBC 5 the doors were locked.

A sign on the door at a Lewisville location said it was closed that day. It said it wouldn’t charge late fees and customers returning tuxedos could keep them. A customer, there, told us he paid for tuxedo rentals he planned to pick up that day and wasn’t sure what to do next.

The two customers who spoke with NBC 5 said an employee later came to the store and fulfilled their orders. We wrote to Al’s Formal Wear through its contact form on its website last week asking for instructions to share with other customers. We did the same for its parent company, Dapper & Dashing.

Dapper & Dashing is listed as one of the brands asking for Chapter 7 bankruptcy protection in a filing dated Friday, August 11. NBC 5 Responds also emailed the attorney listed. We haven’t heard back.

STEPS CONSUMERS CAN TRY

Generally, if a store or business appears to suddenly close, Chuck Bell, a financial policy advocate at Consumer Reports said go online to find out more.

“You could try to reach out to them through social media or through email if they're not answering the phone,” Chuck Bell suggested.

Monica Horton with the Better Business Bureau of North Central Texas said consumers can try to send a certified letter.

“Even if the stores close, that mail is going to be forwarded somewhere,” Horton said. “Hopefully, it will land on the desk of somebody who can help you out.”

Bell said if a consumer paid by credit card, find out if the card comes with purchase protections that provide a refund.

You may also be able to file a chargeback.

“The next step may be to contact your credit card company and see if you can dispute the charges, especially if you've paid a deposit or paid for merchandise that you haven't yet received,” said Horton.

WHAT IF A BUSINESS FILES FOR BANKRUPTCY PROTECTION?

If a business files for bankruptcy protection and it owes you money, merchandise or your property, Thad Bartholow, an attorney who works on consumer bankruptcy cases, said consumers would want to get direction from the court.

“If your car has been stuck at a mechanic that has filed for bankruptcy, you don't get to hire your own repo guy to get your car back. You've got to go through the court process for that,” explained Bartholow.

Generally, a consumer would be able to make a claim with the court. In a Chapter 7 bankruptcy case, an appointed trustee can sell assets to pay debts. Secured debtors, like a bank that provided a loan, get paid before unsecured debtors like a consumer who may have paid for something they didn’t receive or has a gift card to a store that closed.

“If you just think of it as a bucket that's being drained, if after paying the high priority claims there's no water left in the bucket, there's no money to go around,” Bartholow said.

Chapter 11 bankruptcy protection is different. In Chapter 11, the business is seeking a reorganization to continue operating.

The BBB said a good policy for any gift card you receive is to use it quickly.

Horton said, “We find that not only do consumers end up losing the gift cards or we have fraudulent folks that drain the balance off of it without your knowledge. So, use it.”

When it comes to future purchases, Bell said to ask about paying the smallest deposit possible.

“Try to put down the minimum deposit the business will accept and put it down on the credit card,” said Bell. “You have better financial protections if you paid with the credit card than if you've given them cash or paid through some other method.”

Keep track of the receipt and proof of every payment you’ve made.

If a business has not filed for bankruptcy protection, which is handled in the federal court system, filing a lawsuit in state courts or through small claims could be an option.

You could file a complaint with the Attorney General’s office in Texas, though its website points out it cannot routinely resolve individual complaints.

NBC 5 Responds is committed to researching your concerns and recovering your money. Our goal is to get you answers and, if possible, solutions and a resolution. Call us at 844-5RESPND (844-573-7763) or fill out our customer complaint form.