How The Bay's creditor protection filing could affect gift cards and rewards

If you're a member of The Bay Rewards program or have any unused gift cards lying around, you may be wondering what to do now that the department store has filed for creditor protection.

The Hudson's Bay Company (HBC) filed for creditor protection under the federal Companies' Creditors Arrangement Act (CCAA) last Friday. The Ontario Superior Court of Justice granted it on the same day.

"Put simply, Hudson's Bay is out of money and cannot meet its financial obligations as they come due. It is hard not to have a sense of melancholy when considering the application before me," reads the judge's written decision on Friday, supporting the company's restructuring efforts

Hudson's Bay, founded in 1670, is the oldest company in North America and a Canadian retail institution. As it struggles to remain afloat 355 years later, some customers remain in limbo.

The Bay Rewards

Rewards and loyalty programs expert Patrick Sojka says Hudson's Bay Rewards members are bearing the brunt of the situation.

According to the HBC's court filing, the rewards program has been "paused" until further notice during the CCAA proceedings.

It adds that as of Feb. 1, approximately 8,255,145 Canadian customers had outstanding points worth approximately $58,576,606.48.

"[Members] cannot use their points now, and if the company does shutter, all those points are lost," explains Sojka. "There is no clause in the terms that protects the points if they go under."

He adds that even if HBC can bounce back, there is no clause protecting points, so there's no guarantee members can keep their points if the program changes if and when it's unpaused.

Sojka advises Canadians who own the Hudson's Bay Mastercard (powered by Neo) to stop using it "as the points earned may become worthless." He also does not recommend applying for one at this time.

What happens to gift cards?

The court filing says that as of Feb. 1, Canadian customers had outstanding gift cards worth a total value of approximately $24,290,237.82.

Hudson's Bay says it will continue to honour outstanding gift cards in locations that remain open and online.

"I recommend using their gift cards sooner rather than later since HBC is still accepting them," advised Sojka. "By using them right away you are not losing any value just in case they do shutter."

He adds that if HBC manages to emerge from creditor protection, there may be fewer stores, so it may be harder for some shoppers to get to one to use their gift card.

Hudson's Bay's decision to seek the CCAA process follows its unsuccessful attempts earlier in 2025 to have potential lenders refinance some or all of its debt and improve its liquidity position.

The company blamed the economic headwinds of inflation, reduced consumer spending, and the Canada-U.S. trade war for its inability to secure help from lenders.

Currently, within Canada, The Bay operates 88 full-line stores, three Saks Fifth Avenue stores, and 13 Saks OFF Fifth stores under license agreements. It also leases four distribution centres, including one in British Columbia and three in Ontario.

Hudson's Bay employs about 9,400 people, including 647 of whom are unionized.

Some media reports have suggested that The Bay plans to close about half of its 88 locations as a part of its restructuring process, but this has not been confirmed by the company at this time.