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Taco Bell to Pay
$85,500 to Settle Action for Alleged Violations of Gift Card Statute
By a MetNews Staff
Writer
Ventura County District Attorney Erik
Nasarenko has announced that Taco Bell Corporation and its wholly owned
subsidiary, GCTB LLC, have entered into a stipulated judgment under which they
will pay $85,500 to settle an action under the Unfair Competition Law based on
an alleged policy of refusing to redeem gift cards with a remaining balance of
less than $10.
Masarenko made the announcement on
Wednesday. The stipulated judgment was signed on June 8 by Ventura Superior
Court Judge Benjamin F. Coats.
The complaint in the case—People v. Taco Bell Corp., 2023CUMC009794—filed June 2, alleges
(with paragraph numbers omitted):
“Beginning on an exact date unknown to the
Plaintiff, but commencing within the past four years, and continuing to the
present. Defendants engaged in the following acts of unfair competition, as
defined in Business and Professions Code section 17200:
“Defendants failed to redeem gift cards and
gift certificates with a value of less than TEN DOLLARS ($10.00) for cash upon
the request of consumers, in violation of California Civil Code Section
1749.5.”
Sec. 1749.5(b)(2) provides that “any gift
certificate with a cash value of less than ten dollars ($10) is redeemable in
cash for its cash value, relating to the redemption of gift cards with a value
of less than $10.”
The defendants, though settling, have
denied being in violation of that section.
The action was pursued on behalf of “People
of the State of California, by and through” the district attorneys of Ventura,
Los Angeles and Sonoma counties. Under the terms of the judgment, the defendants
must pay $45,000 in civil penalties—$15,000 each to those counties— as well as
$30,500 in investigative costs.
Also included in the judgment is a
provision saying:
“The Parties have stipulated and agreed
that it is impractical and infeasible to make direct restitution to California
consumers who no longer have possession of their gift cards and claim to have
been injured. Therefore, pursuant to California Business and Professions Code
sections 17203 and 17535, Defendants are ordered to pay cy près
restitution in the amount of $10.000. Said amount shall be made payable to the
‘California Consumer Protection Prosecution Trust Fund’….”
The judgment requires that the defendants
provide annual training on the gift card law to managers of the
corporation-owned restaurants in California and to provide training manuals to
its franchise-holders in the state.
It provides that there must be posted at
all Taco Bell outlets in California a placard, at least five inches by seven
inches in dimension, containing, in bold type that is in at least 36-point
type, the message:
“Customers May Receive Cash Back for Gift
Card Balances under $10.00. Visit www.tacobell.com/gift-cards to request cash
back.”
At that address, this advisement now
appears:
“Taco Bell eGift Cards/Gift Cards are not
redeemable for cash, except as required by law. The following states
(‘Cash–Back States’) allow for cash back when your balance drops below a
certain amount.”
Six states are listed with the amounts
remaining on gift cards that will qualify the holder to a refund. Included is:
“Balance less than $10: CA.”
Prosecutors handling the case were Ventura
Deputy District Attorney Andrew Reid, Los Angeles Deputy District Attorneys
Hoon Chun, Duke Chau, and Lesley Klein, and Sonoma Deputy District Attorney
Caroline L. Fowler.
Copyright 2023,
Metropolitan News Company