Taco Bell agrees to court judgment over gift card redemptions

VENTURA COUNTY, Calif. – Ventura County District Attorney Erik Nasarenko announced on Wednesday that Taco Bell Corporation and its wholly-owned subsidiary, GCTB LLC, entered a stipulated judgment and will pay a total of $85,500 over alleged violations of California Civil Code section 1749.5 concerning gift card redemptions.

The complaint, filed in Ventura County on behalf of District Attorney's offices in Los Angeles and Sonoma counties, alleged that Taco Bell, its franchisees, and its corporate agents unlawfully denied California consumers their legal right to cash out gift cards with a balance under $10.

California Civil Code 1749.5 explicitly states that the owner of a gift card with a balance of less than $10 may obtain a refund from the merchant if the consumer does not wish to spend the remaining balance.

“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 Senior Deputy District Attorney Andrew Reid, a member of the Ventura County District Attorney’s Office Consumer Protection Unit. “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.”

Under the terms of the settlement, Taco Bell Corporation will pay $45,000 in civil penalties, $30,500 in investigative costs, and $10,000 to the California Consumer Protection Prosecution Trust Fund.

The settlement also stipulates that Taco Bell's corporate and franchise locations must post a visible notice near the cash registers advising consumers of their right to redeem their gift cards.

The final part of the stipulated agreement requires Taco Bell to mandate annual training on California gift card law and further requires Taco Bell to monitor for compliance.