Dave & Buster’s violated California law by failing to cash out gift cards with a value of less than $10, according to a new putative class action filed in state court.
“The action, if successful, will enforce an important, ongoing right of consumers affecting the public interest and would confer a significant benefit, whether pecuniary or non-pecuniary, on a large class of persons (i.e., all California consumers who possess Defendant’s gift cards with a balance of less than $10),” according to the complaint.
Jason Skinner alleged that for the last several years, the company has violated a 2008 law mandating that businesses redeem gift cards with a balance below $10 for cash. Skinner himself requested cash when the balance on his Dave & Buster’s gift card fell below $10.
But his food server told him he could not receive cash and the balance had to remain on the card for future use at Dave & Buster’s. An investigation by the plaintiff’s attorneys prior to bringing suit resulted in similar exchanges with the defendant’s employees, who “consistently refused to honor valid requests for cash back on gift cards with a balance of less than $10,” according to the complaint.
The defendant’s advertising reflected this position, Skinner said. A statement on the back of its gift cards read: “This card will not be replaced if lost or stolen and user will not be issued any cash back.”
Both in practice and policy, Dave & Buster’s violates California law, the suit claims. In 2008, Senate Bill 250 included an amendment to a gift card law that requires that “any gift certificate with a cash value of less than ten dollars ($10) is redeemable in cash for its cash value.”
For violations of California’s gift card law and unfair competition law, the suit seeks an order that Dave & Buster’s comply with Senate Bill 250 and honor all requests for the cash value of a card with a balance of less than $10, and that it modify its gift cards and other advertising to comply with the law. In addition, the company should provide training and written instructions on the law for all employees, post notices in all California locations to inform consumers about their rights, and pay attorney’s fees and costs for the lawsuit.
To read the complaint in Skinner v. Dave & Buster’s Inc., click here.
Why it Matters: In his complaint, Skinner alleged that many retailers have failed to comply with Senate Bill 250. He cited a judgment against Cinemark USA in a case brought by the District Attorneys of Solano and Shasta Counties, as well as a $225,000 civil penalty levied against Starbucks after being taken to court by three DAs in the state.