Amway Agrees to Class Action Settlement Relating to Gift Cards

Posted on: March 11th, 2011 by Steve Larson
Share

A California court has approved a settlement agreement in a class-action lawsuit alleging that Amway 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.

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.

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 www.giftcardsettlement.com will be sent out by April 10, 2011. Consumers will have until June 20, 2011 to obtain a new card.

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.