Target sued for unlawfully earning millions by refusing to reimburse customers for the remaining balance on their gift cards.
A class action lawsuit was recently filed against retail giant Target Corporation for its’s refusal to reimburse customers for the remaining balance on their gift cards. By so doing, Target violates the laws of many states and its own stated policies regarding its gift cards.
According to Target’s financial statements, in both 2021 and 2022, over $900 million worth of gift cards issued in each year had not been redeemed. Target’s stated policy is that their gift cards never expire but acknowledge that a portion of their gift cards will never be redeemed.
“Revenue from Target gift card sales is recognized upon gift card
redemption, which is typically within one year of issuance. Our gift cards do
not expire. Based on historical redemption rates, a small and relatively stable
percentage of gift cards will never be redeemed, referred to as “breakage.”
Estimated breakage revenue is recognized over time in proportion to actual
gift card redemptions.
Target violates State laws and its own policy
According to Target’s own policies regarding its gift cards, “Target Gift Cards cannot be redeemed for cash or credit except where required by law.”
Contrary to Target’s representation and its own stated policy that gift cards can be redeemed for cash where state law requires that option, Target makes its gift cards completely non-refundable and denies customer refunds for the remaining value even when state laws require it to do so.
States laws were enacted to protect consumers against gift card issuers receiving unjust enrichment by unlawfully claiming back unused card balances.
Class action seeks compensation for Plaintiffs
Have you ever sought to redeem the unused balance of your Target Gift Card? If so, and you’ve been refused you may be eligible for compensation. To understand your rights, please fill out the form below, and a lawyer will contact you within 24 hours.