Abercrombie Winning Class Action Battle Over Promotional Cards

During the 2009 Christmas season, Abercrombie and Fitch stores offered a promotion for a free $25 gift card for every $100 spent in the stores. All advertising, including web, email, and in-store, included various terms and conditions, including that the promotional cards would expire on January 30, 2010. When a consumer attempted to redeem the gift cards in April 2010, the consumer was told that the cards had been voided, leading to the present class action lawsuit. The consumer argues that the expiration date language on the face of the gift card (no expiration date) prevails over the promotional terms.

On Friday, a judge from the Northern District of Illinois ruled in favor of the retailer on the consumer's motion for summary judgment. The consumer argued that the promotional contract was separate from the gift card contract. However, the judge said that the terms and conditions on the face of the gift card were not sufficient to form the basis of a contract under Illinois law and that the promotional contract (with its expiration dates) prevailed.

This is a fatal flaw, which not only causes the motion to fail, but also puts the consumer's entire case in jeopardy. The Court set a status hearing for September 10, 2015, in which the case is expected to be dismissed.

Issuer Recommendations

Much of this case, including the related battle with Abercrombie's insurance company on whether it was required to defend the retailer, could have been avoided with some strategic planning. Generally speaking, gift cards are not permitted to expire in less than 5 years, while promotional cards may have shorter expiration dates. Barganier recommends that companies tailor their promotional and gift cards to avoid the confusion that occurred here. By using a separate promotional card, Abercrombie could have made it clear to any consumer that the card had a short expiration date without resorting to the five year court battle.

An ounce of prevention is still worth more than a pound of cure.

See Also:
Prepaid Card Planning Goes Beyond Legal Analysis
Google Sued for California Gift Card Practices
Federal Judge Sends Gift Card Case Back to State Court