Chipotle to pay $246,000 in lawsuit settlement over gift card balances

(FOX40.COM) — Chipotle Mexican Grill is set to pay $246,000 in a lawsuit settlement over gift card balances under $10, according to the Los Angeles County District Attorney’s Office.

According to officials, the consumer protection lawsuit alleges that the national restaurant chain failed to allow California consumers to cash out Chipotle gift cards with a remaining balance of less than $10.

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“Gift cards are real money purchased with hard-earned cash,” Los Angeles County District Attorney Nathan J. Hochman said. “California law is clear that consumers have the right to redeem gift cards with a balance under $10 for cash. I thank Deputy District Attorney Duke Chau of our Consumer Protection Division for handling this case along with our partner district attorney’s offices throughout California. Thanks to their hard work, companies throughout California are held accountable.” 

The final judgement includes:

• $145,467 payment for civil penalties with $36,367 to the Los Angeles County District Attorney’s Office
• $88,533 for investigative costs with $20,000 to the Los Angeles County District Attorney’s Office
• $12,000 to the California Consumer Protection Prosecution Trust Fund to enhance investigation, prosecution and enforcement of consumer protection

Meanwhile, Chipotle denied any wrongdoing and is now required to have a website portal for gift cards where consumers can request a refund for cards with a balance of less than $10.

Chipotle also has to have a notice on the new gift certificates alerting Californians that they may redeem the gift card for cash if its value is less than $10.

Additionally, the company is not allowed to use information from the gift card redemptions for any other purposes unrelated to the redemptions, officials said.

“Consumers are watching every penny in today’s economy and should never have to fight for rights guaranteed under state law,” Rafael Carbajal, Director of the Los Angeles County Department of Consumer and Business Affairs, said. “This settlement makes clear that Los Angeles County will hold businesses accountable when they fail to follow consumer laws.”