Fast food chain Taco Bell was ordered to pay thousands for allegedly denying California customers the right to cash out gift cards valued at less than $10.
The complaint was filed on behalf of the district attorney’s offices in Ventura, Los Angeles, and Sonoma counties.
The ruling ordered Taco Bell Corporation and its subsidiary, GCTB LLC, to pay $85,500 for violating California’s gift card law, according to the Ventura County District Attorney’s Office.
According to Civil Code 1749.5, the owner of a gift card with a balance of less than $10 can obtain a refund from the merchant if they do not wish to spend the remaining balance.
The settlement terms state that Taco Bell will pay $45,000 in civil penalties, $30,500 in investigative costs, and $10,000 to the California Consumer Protection Prosecution Trust Fund.
“Gift card redemption laws ensure that large corporations do not profit, at the expense of the consumer, off unspent dollars that consumers cannot or do not wish to use at that retailer,” said Ventura County Senior Deputy District Attorney Andrew Reid. “In California, consumers have the right to receive unspent gift card amounts less than $10 so that they can use that money as they wish.”
Taco Bell’s corporate and franchise locations are required to post a visible notice near cash registers advising customers of their right to cash out gift cards and the proper method to obtain the redemption.
Taco Bell’s gift cards must include a message directing customers to the company’s gift card redemption website.
Annual training on California’s gift card law is mandated for all Taco Bell restaurant managers and franchisees along with express monitoring for compliance by corporate.