The legal ins and outs of gift cards can be tricky for companies, especially if the cards have anything except the face value actually written on them. In 2009 Apple was sued over its iTunes gift cards, some of which advertised that songs on the music player were priced at $0.99. The twist is that they were – until Apple very publically updated its system and songs began selling for $1.29. Some cards sold by third-party retailers, however, still stated that songs were $0.99, and as the cards remained valid, Apple was forced to settle a lawsuit from consumers holding the original cards.
There are a variety of ways companies have fallen foul of gift card and voucher rules.
Now, Abercrombie & Fitch is facing a class action after a nationwide class was certified just last week. The company is accused of failing to honor gift cards given out as part of a winter holiday promotion in 2009. Gift cards valued at $25 were given out in-store with the cards themselves stating they had “No Expiration Date”. A couple of months later, Abercrombie voided the cards, arguing that the cards had been within sleeves explaining that they were to be used by January 30, 2010.
The company faces legal action for breach of contract, and the lawsuit seeks compensation equaling the value of the voided cards.
There are a variety of ways companies have fallen foul of gift card and voucher rules. Groupon recently settled a class action about its vouchers’ expiration dates, and whether a special deal voucher which had expired could be redeemed for the amount it was worth instead of the amount customers actually paid for it. Borders, the now bankrupt bookstore, has been facing consumer claims for years to honor the value of gift cards – thought to be around $200 million at the time of the store’s closure. Only recently did a court decide that the business did not have to honor the cards’ value, and only then because the value was so great that it would effectively cripple the remaining estate. Hardly a victory for a bankrupt company.
For Abercrombie, the issue at hand is thought to be worth about $5 million. The clothes retailer has argued that it would be impossible to locate certain class members, and that cards were given out in-store and online, with consumers informed that an expiration date applied despite the card’s written content. The Northern District Court of Illinois disagreed, and has identified class members as anyone who received a promotional gift card and retained it, or who disposed of it once they had been told it was invalid. Consumers who disposed of the card for different reasons, who gave the card away, or those who lost or received a refund, are not included in membership.
Consumers who wish to be excluded from this class must do so before July 30, 2013. The case is Boundas v. Amercrombie & Fitch Store, Inc, No. 10-C-4866. Information on class membership and exclusions can be found at http://www.abercrombieclassaction.com.