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5 ways to cash in on Borders' bankruptcy

The future of the Borders bookstore chain seems dimmer than ever. But on the bright side, liquidation sales across the country mean great deals for customers.

By Stacy Johnson Feb 22, 2011 10:16AM

This post comes from Karla Bowsher at partner site Money Talks News.

 

What do a book about the F-word and a bottle of Dr Pepper-flavored gourmet jelly beans have in common? I bought both for 30% off when my local Borders bookstore went out of business in December. And your nearest store could be next.

 

Borders, now in bankruptcy, expects to close 204 stores by April, which means chances are high that you too may be able to cash in. Borders plans to hold liquidation sales in these stores. Post continues after video.

According to the 21-page bankruptcy petition (.pdf file) filed Feb. 16, the company's debts outweigh its assets by more than $17.5 million. As a result, it's forced to downsize and attempt to stay alive on a smaller scale. "Borders is not going out of business," says BordersReorganization.com, which was launched to explain the Chapter 11 bankruptcy filing. "Borders, however, will be closing underperforming stores within our network over the next several weeks."

 

To find out if a store in your area is closing, check Borders' own list (.pdf file), helpfully alphabetized by state and city.

 

To find out how you and your pocketbook can take advantage of these stores, read on:

 

Scope out everything. When my local Borders hung signs that said "everything must go," they weren't kidding. In addition to the marked-down books, music and gifts, even the couches that seated page-flipping and coffee-sipping customers and the bookshelves themselves were for sale.

 

Be sure you want it. Even if the item you're eying is marked down, take a moment to think about whether it's still worth the money. Items purchased during liquidation sales are often nonreturnable. The signs in the windows of my Borders before it closed for good clearly stated that everything must go -- and that nothing was returnable. But even if yours doesn't say so, it's wise to assume that's the case if you don't want to get stuck paying for what turns out to be an impulse buy or a defective product.

 
Be sure it's the best deal. When my Borders started its liquidation sale, everything was 30% to 40% off, although that amount can vary from store to store. But even if you find something marked down by 50% or more, realize that it still may not be the best deal. Especially if you're willing to buy used, a used bookstore or marketplace-like website may sell the same item for even less than a liquidating Borders.

I frequently browse bookstores but rarely purchase books from them. I use them to scope out books I'm interested in and then go home to find them for less money on sites like Half.com. (It just so happened that adding a crisp, clean, hardcover copy of "The F Word" to my linguistics book collection was well worth the 30%-off price tag.) Because you can't really give used books as gifts, however, liquidation sales are also a great time to purchase presents (remember: Easter is in April and Mother's Day is in May) -- as long as you're sure the recipient won't want to return them.

 

Spend gift cards while you can. Borders claims its gifts cards won't be affected by the bankruptcy. The thing is, now's not the best time to take Borders' word on the topic. Historically, the value of gift cards issued by bankrupt and even soon-to-be-bankrupt companies has been unpredictable.

 

"In the past, some troubled retailers have continued to honor gift cards while restructuring under bankruptcy reorganization, while others put restrictions on how the cards could be used," The Detroit News reported. "But the stores may not have a choice if a bankruptcy court decides to put claims from gift card holders at the back of the line of creditors."

 

According to its bankruptcy petition, Borders owes hundreds of millions to creditors like publishers and greeting card manufacturers. So, if you want to be on the safe side, spend your gift cards ASAP -- and certainly don't purchase any.

 

Save with a smile. Last but not least, remember to be nice -- and neat. As shelves empty during liquidation sales, products tend to get tossed about by frenzied shoppers who are too focused on digging for the best deal to be considerate of staff.

 

I visited a closing Borders just before the holidays, so it was especially busy and messy. One employee snapped at me when I picked up a notebook from a display he said he had just painstakingly reorganized. Normally, I would have snapped right back or considered reporting him, but instead, I apologized and promised to put the item back where I found it. After all, the holidays were approaching and the poor guy may not have known when he would lose his health insurance or find his next paycheck. Besides, courtesy doesn't cost a dime.

 

More from Money Talks News and MSN Money:

11Comments
Feb 22, 2011 4:55PM
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Your comment, about browsing bookstores but rarely buying from them is just why you're now writing about a liquidation sale. I work at a closing Borders and I can tell you it's a very sad and disgusting process. People do not care if they trash the place .  It's appalling. But you were right in not snapping back at the employee who snapped at you. For us, it's like being at a wake and so many customers are insensitive to that fact that it's easy to snap. There is no incentive to be nice any longer. The company has discarded you and your coworkers and the community has lost a valuable asset.

What's interesting to me is how the bargain seeking vultures flock into a closing store and wait in line for an hour and a half in order to get 20 percent  off their purchases. If they'd been Borders Rewards Members, a free service, they would have gotten a discount coupon for at least 33 percent every week, often for 40 percent  or as much as 50 percent  off. Then after waiting in line for that 20 percent off, one gloated to me how she found a couple of Christmas presents for next year. Good for you, I hope you'll pass them out while you think about how my coworkers may not be able to afford a Christmas this year. And why weren't you here supporting us this past Christmas?

It's the end of an era and it's very sad.

Feb 22, 2011 3:12PM
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I visited my local Borders yesterday (a holiday!) and I was astonished by the mess and how people cannot be civilized while shopping for bargains.

 

Then it ocurred that no one cares!

 

Not the public shopping...

Not the employees loosing their jobs...

 

It was really sad to see.

 

Feb 22, 2011 4:26PM
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It is incredible to see how many people  on this and other commentary boards do not know the difference between lose and loose. Pathetic.
Feb 22, 2011 4:35PM
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When there are no more brick and mortar bookstores, then Wal-Mart will be dictating what books will be sold and you can bet that you won't be able to buy a book about the F word!
Feb 22, 2011 4:50PM
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gamerk316...let me get this straight.  You are glad they are in bankruptcy because of the amount of stores they have caused to close over the years.  How many have they forced to close?  And how about the thousands that they have employed?  Most mom and pop stores hire a skeleton staff, pay minimum wage and certainly do not provide insurance coverage.  Borders pays more than minimum, employs many more per store and provides insurance for full time staff.  But of course, you are glad that is all going away...and not only that, but you want the publishes, who also employee thousands of people, and help support industries such as shipping, storage and transportation, to also suffer for this.  Sounds like a great and caring person there!
Feb 22, 2011 10:04PM
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Yes, I'm a Borders Rewards member too and am sad to see the local stores closing. I often shopped at Borders but skipped the liquidation sale. The employees were always nice and helpful and I heard that they would be let go once the inventory sells out (or April, whichever comes sooner). No reason for me to speed up the process.

I might add that I was shocked when I saw the store on the local news. It looked like a disaster area, with more books on the floor than on the shelves. Honestly, can't people be decent customers even when they know the employees are about to lose their jobs?

And what is up with people standing in line 90 minutes for a deal that's not even as good as the coupons the store puts out every week? Borders should have held a liquidation sale on April Fool's Day last year - the raptors would have never caught on and the chain would probably be in the black today....
Feb 22, 2011 7:31PM
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JMTR:  That's too bad that you're losing your job.  I hope that you can find something relatively quickly...I've been in that situation before and it sucks!  I am a Borders Rewards customer and  my reaction was exactly what you said. When I walked into the Borders that is closing by my house, I thought that people were waiting for the new iPhone!  It's a shame that all these people couldn't show their support by making purchases throughout the year...and yes...I know that corporate Borders shares some of the blame, but I'm attesting to the "vulture" comment that you made.  I don't particularly care for the other big corporate bookstore, but I still wouldn't wish for them (the employees) to lose their jobs.  The funny thing about all the people shopping at the closing Borders by my house is that they tore through the store for a 20% discount...in this part of the city, taxes are 9.75%.  Had they actually signed up for the rewards program...the 33% would've been a better deal.
Feb 22, 2011 5:16PM
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I went to one of their liquidations and the prices didn't seem that good. Their math seemed a little faulty. There are still lots of places I can pay full price for less.  I didn't buy a thing. I had much better luck at Borders before they filed for bankruptcy.

GroovyMom, this is one of the few areas where Wal-mart is not at fault. Wal-mart always has an awful, tiny little book selection. I rarely buy books at Wally World because they rarely have anything I want to read. Over the years all the bookstores have had dwindling offerings of the genres I like to read. They all offer to order any book I want but I have always preferred to see a book first before I decide to buy it. Sometimes I go to a store looking for a good read but there isn't enough of a selection so I leave empty handed.

The first nail in the coffin for the major book stores occurred several years ago with Amazon. People liked being able to stay home to buy books and just have them shipped. You would be surprised at how much of the country still doesn't have any of the big book stores nearby. It's not hard to see how people would rather have books shipped than drive 60 miles or more to a book store. The more recent attack comes from the IPad and e-readers like Kindles and Nooks. Many of the readers require that the e-books be bought from specific vendors (For example Kindle books have to be bought from Amazon.) I personally don't like that but so far standardization doesn't seem to be a priority with the manufacturers. Also, as with Amazon you can simply buy your e-books online and not have to go to a physical book store. People have just one more reason not to go to bookstores. I hate to see book stores disappear but it's starting to look inevitable.

Mar 10, 2011 1:06PM
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I got my gift card in the mail yesterday from Borders, probably won't be able to get what I originally ordered, but at least I got something hopeful I will be able to use it.
Feb 22, 2011 4:02PM
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I am not happy with Borders, I received a gift card last year, and I heard about the one closing in my area due to contract, so I used my gift card at the beginning of this year online.  I purchased three items one was a pre-order.  I received in my e-mail last week that my pre-order was cancelled.  I contacted them via email to state I did not cancel my order.  I received another email that they accidentally cancelled my order and to reprocess my order by calling an 800 number.  I called this number and it was hard to understand the woman I was talking to, but in the end,  she tried to charge me instead of reprocessing my order.  So I am out a gift card amount plus my purchase on this gift card.  In the email they first sent to me they state they will send another gift card.  Now I am reading they may limit or not accept the gift cards.  This is ridiculous. I sent another email to them and of course have not heard back as of today. If this is Borders attitude no wonder they are having problems.  When you email a company and you get no response back and you call a company and they won't do anything this is just stupid.  I do know they can reprocess an order that has been cancelled as I asked my husband who deals with this sometimes and he stated they would be able to So BORDERS REPROCESS MY ORDER.
Feb 22, 2011 3:26PM
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No sympathy for a chain which has unemployed so many small businesses over the years.  Hopefully, this will end up dragging the major publishers down with them...
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