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Gift Cards

Gift cards make popular and versatile gifts, and for some companies, make for massive lawsuits. Various companies have been sued for gift card violations. For example, last August, Dave & Buster’s was sued in California for violating the cash-out provision under California’s gift card law. In California, a gift-card issuer must allow the holder of a card worth less than $10 to redeem it for cash upon request. Moreover, California does not permit gift cards to carry an expiration date.

Major retailers are being threatened with litigation for not following California’s gift card laws. Groupon, for instance, had to settle its case for 8.5 million dollars in aa lawsuit alleging that Groupon deals constituted gift cards and that the expiration dates listed violate both federal and state laws. Similarly, Chipotle is facing legal trouble for refusing to cash-out gift cards with a value of ten dollars or less remaining on them, in violation of California statute. That suit alleges that Chipotle has made 9.3 million dollars from unredeemed gift cards, even though it settled a case for the same violations back in 2011.

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