After a tumultuous struggle to stay in business over the past several years, Bed Bath & Beyond declared bankruptcy on Sunday. That means your stash of its 20%-off coupons are about to be useless.
The struggling home goods retailer issued a dire prediction on Thursday, calling into doubt its ability to stay in business much longer and said it was exploring a path forward that includes filing for bankruptcy.
A bankruptcy filing, which reportedly could come in a matter of weeks, might spell the end of its iconic coupon programs, especially if the company pursues a bankruptcy process that involves liquidation rather than just restructuring.
“Creditors wouldn’t want to allow shoppers to tack on those 20%-off coupons on top of 70% off liquidation prices,” said Burt Flickinger, retail expert and managing director of retail consultancy Strategic Resource Group.
Other retailers have followed a similar game plan after bankruptcy and store closings.
Toys ‘R’ Us honored its gift cards, store credit and coupons for a 30-day period after it filed for bankruptcy in 2017, and subsequently liquidated its US business. The toy seller has since begun to attempt a comeback through a partnership with Macy’s, and opened its first post-bankruptcy store in 2019 under new ownership.
It’s not just creditors who might take issue with the store honoring the coupons on top of liquidation discounts. The companies that sell the products wouldn’t want their merchandise knocked down so heavily, either.
Big Blue became a company icon
Bed Bath & Beyond introduced its oversized coupon for 20% off a single item three decades ago.
Over time, the oversized postcard-like mailer and digital coupon with an eye-popping purple-blue border and font blaring “20% off in-store or online” developed a cult following and became a successful marketing strategy to lure in repeat shoppers, said Flickinger.
The “Big Blue” coupons became a pop culture reference as celebrities and late-night talk show hosts popped it into their on-air conversations.
Rumors swirled on various social platforms that Big Blue coupons never expire, even though the weekly coupon does feature an expiration date.
Then the pandemic hit and walloped the retail industry. With stores closed for months, and consumers rethinking their nonessential purchases, Bed Bath & Beyond sales and profit took a hit. In late 2020, the retailer said it was scaling back on its popular coupon program to boost its business.
Two years later, company executives called the move a ‘big mistake,” admitting they had misjudged how much shoppers had come to embrace the regular cadence of the Big Blue coupons.
And now, Big Blue’s future could truly be in jeopardy. It depends on what comes next.
“Whether or not Bed Bath & Beyond loyalty programs would survive also depends, in part, on whether the company goes through Chapter 11 bankruptcy, known as restructuring, or Chapter 7 bankruptcy, that is, liquidation,” said Chandan Jha, associate professor of finance at Le Moyne College in Syracuse, NY.
“If it is the former, then there’s a very, very high chance that the reward programs will survive and the company will honor any existing rewards and coupons. After all, the company would not want to lose their customers and these loyalty programs or loyalty rewards are made to retain customers,” said Jha.
Now that the company is going through a liquidation process, Bed Bath & Beyond said it’s the end of the road for the coupons.
“Since the company no longer exists … the points would simply be useless,” said Chandan Jha, associate professor of finance at Le Moyne College in Syracuse, NY.
