Gift cards and store credit will be honored through March 11, USA Today reported.
The online store is also expected to shut down, as the company filed Chapter 11 Tuesday, according to USA Today.
The bankruptcy petition said the company had debts and assets of between $500 million and $1 billion, according to the newspaper.
The move will not affect franchised or Latin American stores, CNBC reported.
Company owners have been trying to find someone to buy the chain but have not been able to make a deal, a source told Reuters last week.
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This was the second time the company has filed for bankruptcy, the first was in April 2017. It came out of the bankruptcy status more than a year ago, still having $400 million in loans from a previous total of $800 million, court filings showed and creditors took ownership of Payless, Reuters reported.
"The challenges facing retailers today or well documented, and unfortunately Payless emerged from its prior reorganization ill-equipped to survive in today's retail environment," Payless Chief Restructuring Officer Stephen Marotta told media outlets, including CNBC, in a statement. "The prior proceedings left the company with too much remaining debt, too large a store footprint and a yet-to-be realized systems and corporate overhead structure consolidation."
Payless also closed about 900 stores during its first bankruptcy, USA Today reported.
Payless was founded in 1956 in Topeka, Kansas, according to Bloomberg.
It had about 3,500 stores in 40 countries and employed about 18,000 people as of last fall, USA Today reported.