What happens to gift cards and deposits when a store sells?

A store rarely closes with a completely clean slate. There are usually gift cards customers haven’t yet redeemed, deposits held against special orders not yet delivered, and loyalty-program balances representing points customers expect to use — all of which are effectively money the store already collected but hasn’t yet delivered value against, which makes them a real liability rather than a formality to sort out later.

Provincial consumer protection law shapes what’s possible

Several provinces restrict how gift cards can be treated, commonly prohibiting expiry dates and limiting certain fees, which means neither party can simply decide the cards stop being honoured once ownership changes — the underlying consumer protection obligation generally continues to apply to whoever is operating the store, regardless of who originally sold the card. A seller or buyer assuming the liability quietly disappears at closing is working from a wrong assumption.

Whether the liability transfers depends on deal structure

In a share sale, the corporation that issued the gift cards and collected the deposits continues to exist under new ownership, so it generally remains the party responsible for honouring them. In an asset sale, the buyer is acquiring specific assets rather than the seller’s full corporate history, so responsibility for pre-closing gift cards and deposits does not automatically follow unless the purchase agreement expressly has the buyer assume it — which most buyers will only agree to once the size of the liability is actually known.

How the number typically gets settled

Because the true value of outstanding cards, deposits and loyalty balances is rarely precise on closing day, deals commonly estimate it from historical redemption patterns and either reduce the purchase price by that amount or hold it back until a clearer figure emerges, rather than leaving it as an informal understanding that surfaces as a dispute months later. Many buyers choose to honour existing cards regardless of the legal position, simply to protect customer goodwill in the community the store depends on.