What To Do When A Business Shuts Its Doors

Customers can be left in the lurch when a business liquidates

January 28, 2009
In recent months it's been Circuit City and Linens N Things. And with the economy the way it is, even more businesses could be facing liquidation and closing their doors for good.

When a business goes out of business, it can leave some consumers in the lurch. Recently, North Carolina Attorney General Roy Cooper offered some advice.

"During these tough times, consumers really want to make sure they get what they pay for," said Cooper.

If you paid for merchandise by credit card and never received it, contact your credit card company and dispute the charge in writing, he says. If you purchased an extended warranty, check to see if a third party holds the warranty and if it will still be honored. If you have a problem with a product that is still under manufacturer's warranty, contact the manufacturer directly for repairs.

Other tips include:

• If the company continues to debit money from your bank account for a service that is no longer available, file a complaint with your state Attorney General's Consumer Protection Division.

• If the company files for bankruptcy, you may need to file a claim with the federal bankruptcy court in the state where the business is headquartered. Many retailers that shut down hold liquidation or going out of business sales. Keep the following tips in mind before you go searching for a deal at these sales:

• Despite promises of deep discounts, the prices offered at going out of business sales aren't necessarily the lowest available. Shop around and check out prices at other retailers before you buy to make sure you really are getting a good deal.

• Know the rules. Most liquidation sales allow only certain forms of payment such as cash or credit cards. In most cases, all sales are final and products are sold without a warranty. Also, most liquidation sales do not accept coupons or gift cards.

• State law requires businesses to get a permit from local government before advertising or holding a going out of business sale. You can check to see if the liquidator has a permit from your local government. Some businesses instead get authorization to hold a going out of business sale from a federal bankruptcy court.

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