Toys ‘R’ Us Canada Stops Accepting Gift Cards: 2026 Creditor Protection Update

If you still hold a plastic gift card for the iconic toy retailer in your wallet, you likely missed your chance to use it. Toys “R” Us Canada officially stopped accepting these cards as of yesterday, Monday, February 16, 2026. This move comes as the retailer navigates complex creditor protection proceedings.

We verified the details from recent court filings to help you understand what this means for your money and the future of these stores.

The Final Cutoff for Gift Card Holders

Shoppers face a tough reality this week. A court decision mandated that the retailer accept gift cards only until the end of the business day on Monday. As reported by The Canadian Press, the company ceased honouring them immediately after that period wrapped up.

This situation leaves many consumers in a bind. Court filings reveal that the company had more than $36 million in outstanding gift card obligations. That is a massive amount of unspent money sitting in drawers across the country.

You also cannot spend these funds online. The retailer paused its e-commerce sales recently to revamp its website. That decision forced anyone with a card to visit a physical location before the Monday deadline. If you missed that window, the card currently holds no value at the register.

Why The Retailer Stopped Accepting Payment

This freeze on gift cards ties directly to the financial struggles of the company. The retailer filed for creditor protection earlier this month. This legal status shields an insolvent company from paying its debts immediately while it creates a plan to survive.

Ontario Superior Court Judge Jane Dietrich granted the company permission to stop accepting the cards. She also approved an extension of their creditor protection until May. This extension gives the business stability and breathing room to develop a sale and investment process, according to legal endorsements cited by Global News.

The company owes substantial sums to vendors. We know that creditors include industry giants like Lego, Hasbro, Mattel, and Spin Master Corp. The retailer owes at least $120 million to these vendors and owes significant amounts to landlords like Cadillac Fairview and RioCan Holdings.

More Store Closures Are Coming

The footprint of Toys “R” Us Canada locations continues to shrink. Only 22 stores remain across the country right now. However, the court has given the retailer permission to liquidate more locations if they cannot negotiate leases with landlords.

We already know about specific closures confirmed by local outlets like Insauga:

• Newmarket, ON: The location at Upper Canada Mall is set to close by March 31.
• St. Catharines, ON: The store at the Niagara Pen Centre is also slated for closure.

This follows a trend of closures in Ontario. Stores in Oakville, Burlington, Mississauga, and Thornhill already closed their doors over the last year. The retailer attributes these decisions to “operating challenges” and the need to liquidate underperforming assets.

How We Got to This Point

Several factors pushed the toy giant into this corner. The retailer cited high inflation and rising labour costs as primary drivers for their financial trouble. Supply chain disruptions also played a heavy role in their inability to stay profitable.

A major shift toward e-commerce also hurt their bottom line. Ironically, the company paused its own online sales right before this crisis peaked. This left them unable to compete effectively in a digital-first market.

Putman Investments currently owns the chain. They bought it from Fairfax Financial Holdings Ltd. in 2021. Fairfax had previously paid $300 million to rescue the company in 2018. Despite these efforts, the retail landscape proved too difficult to navigate without major restructuring.

What This Means for Shoppers Now

You will likely see liquidation sales continue at the remaining stores. The court authorized the company to conduct these sales to pay off creditors. If you plan to shop, bring cash or debit/credit cards, as those gift cards clearly won’t work.

Alvarez & Marsal is the court-appointed third party guiding the company through this process. They must approve any further store liquidations. This adds a layer of oversight to ensure the process remains fair to the people the company owes money to.

Keep an eye on your local store. The situation changes rapidly, and inventory levels will likely drop fast as they attempt to clear out stock. We will keep you posted if the court makes any new rulings regarding consumer reimbursement.

Related Reads: 

• Solar Eclipse 2026: Path, Time, and How to Watch the Rare ‘Ring of Fire’ 
• Toys “R” Us Canada gift cards effective till Monday
• CLOSURE: Iconic chain store slated to close more locations in Ontario