Upset About the Zappos Settlement? Here Are Your Options

There’s been a lot of buzz going around about the Zappos settlement that allows customers to claim a 10-percent-off coupon. Many customers, to put it lightly, are not quite satisfied with the settlement.

As one of our readers succinctly put it: “Sounds like a good deal for them, but a bad deal for me.”

Fortunately, if you feel the same way, you still have options. Keep reading to find out more about the settlement and what you can do if you’re less than pleased with the terms.

What’s this settlement all about, anyway?

The deal, which received preliminary approval from a Nevada district court judge in mid-September, seeks to settle claims centered around a data breach that occurred back in January 2012 and reportedly affected 24 million Zappos.com customers. The company informed its shoppers that an unauthorized party had gained access to their names, email addresses, mailing addresses, phone numbers, scrambled passwords, and the last four digits of their debit and credit card numbers.

After Zappos’ announcement, nine class actions were filed in which plaintiffs claimed the online shoe retailer had failed to adequately safeguard their information and exposed them to a higher risk of identity theft. The cases were consolidated in Nevada under the guidance of one federal judge, who gave a tentative OK to the proposed settlement.

Who is covered by the settlement?

Anyone who had an online account with Zappos on or before January 15, 2012 and an email address on file at the time.

What could I get from the settlement?

Those covered by the settlement will receive a 10-percent-off coupon in the form of a discount code that can be applied to a future purchase on Zappos.com or through the Zappos mobile app. The discount codes are valid until December 31, 2019, unless the settlement is not granted final approval at a hearing on December 20, in which case the codes may expire on that date.

Customers cannot use the code to purchase gift cards or apply them to any previous purchase, but they can transfer or sell the code to someone else for “individual, non-commercial use.”

You should have received your discount code in an email from Zappos Data Settlement Administrator (info@e.zapposdatasettlement.com) with the subject line, “Settlement notification re: 2012 security incident.”

What can I do if I don’t like the settlement?

If you’re not happy with the terms of the settlement, you have several options. The deal has received preliminary approval, but until it receives final approval, Zappos customers can still voice their opinions.

The final fairness hearing, at which the court will hear any objections and ultimately decide if the settlement is fair, reasonable, and adequate, is scheduled for December 20, 2019.

Here’s what you can do before the settlement gets final approval.

Opt Out/Exclude Yourself from the Settlement

If you choose to opt out of the settlement, you are basically saying you don’t want to participate. That means you won’t be able to receive any benefits from the deal, but you’ll also preserve your right to sue Zappos (and Amazon, its parent company) over claims relating to the 2012 data breach. This is the only option that will allow you to file your own lawsuit against the defendants. If you use the discount code, or even if you do nothing, you will forfeit your right to sue over this matter.

To opt out, customers must send a letter to the settlement administrator at the following address:

The letter must contain:

The letter must be postmarked by November 29, 2019.

Remember, if you decide to exclude yourself, you cannot use or transfer your discount code.

Object to the Settlement

If you’re unhappy with the terms of the settlement but still want to be covered by the lawsuit, you can file an objection.

Through an objection, you are asking the court to deny the settlement as a whole; you can’t simply ask for better terms. If the court agrees with your objection and refuses to approve the deal, the attorneys on both sides will need to go back to the drawing board and come up with a new agreement.

To object to the settlement, you must file an objection with the Clerk of the U.S. District Court for the District of Nevada by November 29, 2019.

The objection must contain:

If you are not represented by counsel, you must also mail copies of your objection to the attorneys representing the class and Zappos at the two addresses below.

Class Counsel:

• Ben Barnow 
• Barnow and Associates, P.C. 
• 205 West Randolph Street, Suite 1630 
• Chicago, IL 60606

Zappos Counsel:

• Stephen J. Newman
• Stroock & Stroock & Lavan LLP
• 2029 Century Park East, 18th Floor
• Los Angeles, CA 90067

What happens if I object to the settlement?

If you object to the settlement, the judge will review your objection and either approve or reject the settlement at the final fairness hearing.

You can attend the final fairness hearing if you want to, but you’re not required to attend. You can also hire a lawyer to represent you at your own expense.

You can still use the discount code if you object to the settlement, but keep in mind that if the settlement is not approved, Zappos could argue that anyone who used the discount has already been fully compensated and should not be included in any new settlement.

If you still have questions about objecting, you can check out our Settlement Objection FAQ page, or leave a comment below.

Am I crazy or is this a terrible settlement?

In terms of compensation for Zappos customers, this settlement pales in comparison to other recent data breach settlements.

The Equifax settlement offered several options that included free credit monitoring, up to $125 in cash, identity restoration services, and even up to $20,000 of reimbursement for documented losses.

Similarly, the recent Yahoo data breach settlement allowed claimants to receive two years of free credit monitoring or a cash payment of up to $100.

So, why is there such a stark contrast between these settlements and the Zappos case? Or, as one of our readers put it: “Would the court really allow such a small settlement as repayment for their personal data being released?”

The short answer is, perhaps not. Remember, the court still needs to grant the settlement final approval. But we also have to keep in mind that every case is different.

The Zappos case has been trudging on for nearly eight years now while several courts argued whether customers whose information was not actually misused really had any standing to sue. The case was even offered up to the Supreme Court, who refused to hear the matter.

Some have also argued that Zappos did “everything a responsible corporate citizen would do” upon learning of a data breach by immediately cutting access to its systems, freezing online ordering, and warning customers to change their passwords. The same can’t be said of all companies who have suffered a data breach.

Still, to many Zappos customers it is disconcerting that their information could be out there somewhere in the hands of hackers who may not take advantage of it for many years. And it can seem almost insulting to be offered a 10-percent-discount as reparation.

But remember, while there may be many factors that go into a settlement decision, your voice is one of them. You can still get involved in the process if you want to by objecting to the settlement or excluding yourself and pursuing your own litigation. Just keep in mind that it’s wise to consider consulting an attorney before making that decision. An attorney can help you get a better idea of your legal rights and decide what would be the best option for you.

Where can I find more information about the case?

If you have more questions about the Zappos litigation, check out the settlement website here.

You’ll be able to find general information, case documents, frequently asked questions, and contact information for the settlement administrator and class counsel. And as always, we’ll do our best to keep you updated.