In response to the abrupt closure of all Spa One locations in Tucson last month, BBB of Southern Arizona has received five complaints and several phone calls from consumers.

In the complaints consumers say that they’re unable to contact the company to cancel their memberships, or redeem credits and gift cards purchased from Spa One before they closed their doors. One consumer told BBB that she was charged a membership fee for August, despite the store not being open.

Consumers say signs on the doors of each location state that the business will be closed until Labor Day due to owner illness, and that at least one location has an eviction notice on the door.

Before the sudden closure, Spa One had racked up 10 unanswered complaints with BBB in the past three years- BBB’s standard reporting period- earning the company an ‘F’ rating. BBB has tried to contact Spa One since receiving word that their stores had closed, but the company has been unresponsive.

What steps can consumers take if a business closes its doors for good? BBB suggests the following:

• Go to the last known location to see if the company has posted any instructions or signs.
• Send a registered letter to the company’s last known address asking the owner to contact you. Even if the business is closed, the mail may be subject to a forwarding order. If you don’t know the name of the principals, check with your city or county clerk’s office, or the Arizona (more…)

As a result of the declining economy, the number of retailers closing their doors has increased substantially, leaving confused shoppers wondering what will happen to purchases they haven’t received, incomplete repairs, unused gift cards, and warranties.

Following is advice from Better Business Bureau of Southern Arizona on steps consumers can take if a retailer goes out of business:

What can I do if a retailer goes out of business but doesn’t officially file bankruptcy?

Send the company a letter because their mail may be forwarded. Physically go to their location to see if they left a message on the door for customers. Ask neighboring businesses if they have any information. Try to reach the owner. If you have merchandise in the store, contact the landlord to see if you can be given access to the company’s facility. As a last resort, contact law enforcement.

Warranties

Once in a while, contacting a manufacturer results in you receiving partially or fully-paid-for items even when the retailer is no longer operating. The validity of any outstanding warranties varies for each bankruptcy. If a retailer goes out of business, the consumer may be able to rely on the manufacturer’s warranty. If a manufacturer goes out of business, the consumer may be able to rely on a retailer warranty. Many extended warranties and service plans are provided and administered by third parties and are typically not affected by a retailer or manufacturer closing its doors.

Bankruptcy: Chapter 11

Some companies file Chapter 11. This allows the company to continue operations while it reorganizes for future stability. If Chapter 11 is filed, the company will often still redeem gift cards, fulfill services and deliver on goods. Unfortunately, some Chapter 11 bankruptcies turn into Chapter 7, which provides for closure and complete liquidation. Then the chances for the consumer to receive any compensation are greatly diminished.

Bankruptcy: Chapter 7

Under Chapter 7, the money gained from selling the company’s assets goes to back taxes, secured creditors and employees. That usually depletes available assets. If any assets are left over, they are divided among unsecured creditors, including customers who didn’t receive services or goods already paid for.

Customers who paid with credit cards may be able to dispute the charge with their credit card company to get their money back. Others who paid by debit, check or cash, will need to file a claim with the bankruptcy court administering the process. The deadline is typically 90 days after the filing date. Visit www.uscourts.gov.

Gift Cards

With Chapter 11 bankruptcy, courts will decide if the business must honor gift cards. Under Chapter 7 bankruptcy, the holder must file a claim through the bankruptcy. To avoid problems, BBB advises that consumers redeem gift cards as soon as possible.

For more information visit www.tucson.bbb.org.

Quality Appliance, an appliance repair company in Sierra Vista, and The Providence Institute, a yoga studio in Tucson, recently closed their doors according to consumers who have recently contacted BBB of Southern Arizona.

Complaints received by BBB against Quality Appliance allege that the company went out of business without issuing refunds to consumers for refrigerator parts. Consumers say they ordered parts through the company, but never received them. Consumers are requesting as much as $150 in refunds from Quality Appliance, but have not been able to reach the company for the last two months.

The company’s phone number, (520) 459-1118, has been disconnected and BBB has not received a response to complaints forwarded to its last known address at 5523 S. San Pedro Ave. Sierra Vista 85650.

BBB was also recently contacted by a consumer who attempted to redeem a gift certificate with The Providence Institute in Tucson. The consumer told BBB that when they went to the business at 3400 E. Speedway Blvd STE 114 they found a sign on the door stating the business had closed. The sign did not provide information or instructions on who to contact.

The Providence Institute’s Web site, www.providenceinstitute.com, states that the business has closed, but will reopen under new ownership soon. BBB has not been able to contact the company via the email address listed on its Website, and the company’s phone number has been disconnected.

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