Ribbon Class Settlement?

[MichMan]

Not the Pokorny class action lawsuit....

Mar 08, 2011 07:00 ET
Court Grants Approval of Class Action Settlement Against Amway Corporation in Gift Card Lawsuit

Brant Law Offices and Kawahito, Shraga & Westrick

Consumers Will Be Able to Redeem $20 Million Worth of Expired Gift Cards

LOS ANGELES, CA--(Marketwire - March 8, 2011) - The Superior Court has approved a settlement agreement in a class-action lawsuit alleging Amway Corporation, a Delaware corporation, and its related companies Quixtar Inc., a Virginia corporation, and Alticor Inc., a Michigan corporation, sold and marketed gift cards that contained a notation instructing consumers to "redeem before" a certain date, which plaintiffs contended violated numerous state laws prohibiting or restricting the expiration of gift cards. The settlement provides that consumers will soon be able to redeem or replace more than $20 million worth of expired gift cards.

In Adell v. Quixtar Inc. et al., plaintiffs alleged that as a result of Amway's improper placement of a "redeem before" date on its gift cards, many consumers believed their cards had expired and either disposed of them, or never redeemed them for merchandise. Through a sales force of Independent Business Owners ("IBOs"), Amway marketed and sold various categories of "Ribbon Gift Cards" throughout the United States. Amway has denied that its use of "redeem before" dates constituted expiration dates in violation of any state law.

"Amway received millions of dollars from consumers for gift cards that were never redeemed and that contained 'redeem before' dates that have passed," said James Kawahito, class co-counsel of Kawahito, Shraga & Westrick LLP (Los Angeles). "In California and many other states, laws designed to protect consumers make it illegal for gift cards to contain any expiration date."

After more than two years of litigation, Los Angeles County Superior Court Judge Anthony Mohr granted preliminary approval of the settlement on February 16, 2011. Class-action notices informing consumers they can replace expired or discarded Amway gift cards by visiting http://www.giftcardsettlement.com will be sent out by April 10, 2011. Consumers will have until June 20, 2011 to obtain a new card.

"We are extremely pleased that Amway will no longer be placing 'redeem before' dates on its gift cards," said Lisa Brant, class co-counsel, Brant Law Offices, APC (San Diego). "Now our goal is to get the word out to as many consumers as possible to ensure they are aware of their ability to redeem or replace their gift cards, even if they have already thrown them away."

Additional Settlement Benefits to Consumers Include:

* Class members will have the opportunity to redeem expired gift cards or exchange gift cards for new cards that do not have expiration dates.
* Class members who discarded expired gift cards can receive new gift cards.
* Amway will cease using the words "redeem before" preceding dates on gift cards or any language that specifies a particular date or time period by which redemption must occur.
* Amway will make a $200,000 product donation to a charitable organization.


http://www.marketwire.com/press-release/...407446.htm

[ibofightback]

(merged the two threads on the same topic)

http://www.stockmarketsreview.com/news/115408/

Consumers Will Be Able to Redeem $20 Million Worth of Expired Gift Cards

The Superior Court has approved a settlement agreement in a class-action lawsuit alleging Amway Corporation, a Delaware corporation, and its related companies Quixtar Inc., a Virginia corporation, and Alticor Inc., a Michigan corporation, sold and marketed gift cards that contained a notation instructing consumers to "redeem before" a certain date, which plaintiffs contended violated numerous state laws prohibiting or restricting the expiration of gift cards. The settlement provides that consumers will soon be able to redeem or replace more than $20 million worth of expired gift cards.

I wasn't even aware of this one, certainly looks like it's Ribbon?

[MichMan]

The use of a "Redeem before" date certainly gives the impression that the card expires on that date.

I wonder why Amway fought this for years instead of simply correcting it in the beginning. :scratch:

[ibofightback]

I haven't been able to find the case, but the article says "After more than two years of litigation". With the glacial pace of court cases, this virtually is a settlement at the beginning! If I recall correctly, one of the articles on Pokorny mentioned they'd been working on that settlement for 2 years.

[MichMan]

I couldn't find it either.

But this is in the "Superior Court" which means it is NOT a federal case. It is filed at the county court house in the state court system.

And yes, the pace of state courts is much slower than that of federal courts. The state courts also deal with criminal cases, drunk driving, divorce, bankruptcy, foreclosure, business collections, apartment evictions, etc.

Cases like this can often get pushed back since there is not the "immediate need" for a trial.

[Bridgett]

MichMan Wrote:The use of a "Redeem before" date certainly gives the impression that the card expires on that date.

I wonder why Amway fought this for years instead of simply correcting it in the beginning. :scratch:

Amway has always redeemed the cards, no matter the expiration date. I had a customer find (in her pile of papers) a few albums she had purchased three years prior. We redeemed them just fine.

There are a couple of issues here:

One has to do with the fact that the selection of gifts/items available changes every year. So while the card may still be good, the items from which to choose may not be the same as printed in the album, or what a person would orginally see online.

But this can be resolved by having a note that says something along those lines. Like, "While your gift card never expires, please note that the selection of gifts changes on an annual basis."

Another issue, and probably *the* issue, is that the price of the albums go up. So while someone purchases one for say $40, that same album a few years later is selling for $50.

Or, what do you do when the album changes completely in price points and offerings? As an example, the baby gift albums used to cost $25. And had $25 options. Now the baby gift album cost $50 and has $50 options. The quality and price point has changed completely.

With regular gift cards, the value of the card doesn't change. You buy a card for 25 bucks, it's worth 25 bucks. Ribbon doesn't follow that same pattern. One advantage (of many) of Ribbon is that the recipient doesn't know (unless they research) how much you spent on their gift, like they do with a "normal" gift card.

[ibofightback]

hmmm, I can understand the problem then. Have you noticed any changes they may have made as a result of this settlement+

[Bridgett]

I'm looking at three of Ribbons I have. The albums and the plastic gift cards. These are from two years ago. Forgot I had them.

The cards say ""Redeem before July 31, 2010"

The cards say, "Valid only for merchandise selection shown, subject to availablity."

The albums have no date on them.

The albums say (in bold, by the way), "Gifts are subject to availablity, inventory is replenished through the year with new, and sometimes different, stock. We reserve the right to substitue an item of equal or greater value at no additional cost."

I don't have any from this year. Though they may follow what's on the website, ordermygift.com, which says, "Gift cards that never expire."
I need to order one soon. I'll look at it before I give it away.
[attachment=0]

[MichMan]

Every state is going to be different. The feds passed a law a couple of years ago instituting a minimum standard. It requires that gift cards do not expire within five years. But the law does not prohibit states from enacting tougher laws.

Each state is going to have a standard federal minimum requirement but different state requirements.

Here is the what is required in Michigan:

MICHIGAN AND FEDERAL RULES REGARDING GIFT CARDS



Here are answers to frequently asked questions about Michigan and federal rules regarding gift cards:



1. Can the gift cards that I buy expire?



In general, gift cards purchased after August 22, 2010, cannot expire within five years of purchase. That means a merchant that issues a gift card cannot refuse to accept a gift card "for personal, family, or household use" if you present the card within five years from the time it was purchased or value was added to a gift card. But a merchant can refuse to accept a gift card that was issued more than five years ago, if the terms and conditions were clearly and conspicuously disclosed and one of those terms and conditions was an expiration date of at least five years from the date of issuance.


2. What should I look for when buying a gift card from a merchant?



Although the following list is not exhaustive, as of November 1, 2008, Michigan law now prohibits merchants from doing any of the following:

*

refusing to accept a gift card or gift certificate for personal, family, or household use UNLESS the gift card has an expiration date that is more than five years from the date of purchase, and the gift card is presented after the expiration date;
*

changing the terms and conditions of a gift card after the time of purchase;
*

failing to disclose terms and conditions of a gift card; and


But California says that expiration dates are not allowed. Period.

[expeditionoftruths]

In Canada there is no "use before this date" or any expiration date at all. That's part of the beauty of Ribbon.