According to a recent complaint filed in the Northern District of Illinois, Babies “R” Us implemented its “Endless Earnings" program in April of 2014 as a new component of its baby registry services, promising that consumers could earn “up to 10% back on registry purchases… No limits!” Under the terms of the program, registrants earn rewards based on a specific formula – 5% of the first $300 in registry purchases and 10% of those registry purchases over $300. Certain purchases (such as gift cards and buyer protection plans) are excluded.
Babies “R” Us promised to issue the registrant’s rewards in the form of a gift card approximately 10 weeks after a baby’s expected arrival date. According to the complaint, many consumers received far smaller rewards than they expected, and Babies “R” Us has refused to provide information on exactly how individual rewards were calculated. The plaintiffs allege that rewards given to them by Babies “R” Us were arbitrary and lower than advertised, and that the program was a powerful incentive to induce expectant parents to register at Babies “R” Us as opposed to another store.
TIP: Advertisers should ensure that the terms for rewards programs clearly and accurately reflect the rewards a consumer will earn. Material restrictions and limitations should be clearly and conspicuously disclosed in any advertising for the program.