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.
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