Chipotle to pay $246k fine for alleged gift card violations
Chipotle Mexican Grill, Inc., with 499 locations in California, will pay $246,000 in civil penalties, restitution, and costs to resolve allegations of violating the state’s gift card redemption law, the Ventura County District Attorney’s Office announced Oct. 23.
“California law ensures that consumers can keep every dollar that is rightfully theirs,” District Attorney Erik Nasarenko said in a press release.
“This settlement not only holds Chipotle accountable but also guarantees that consumers can easily obtain the refunds the law provides,” he said.
A civil complaint filed on behalf of the district attorney’s offices of Ventura, Los Angeles, Sonoma, and Shasta counties alleged that Chipotle unlawfully denied consumers the right to cash out gift cards with balances of less than $10.
California Civil Code section 1749.5 provides that consumers holding gift cards valued under $10 may request a cash refund rather than spending the remaining balance.
Under terms of a stipulated judgment, Chipotle will pay $145,467 in civil penalties, $88,532 in investigative costs, and $12,000 in restitution to the California Consumer Protection Prosecution Trust Fund.
The company must also launch a dedicated website portal for consumers to request refunds for gift card balances under $10.
The portal is available at chipotle.com/gift-card-cashback. Chipotle gift cards will be updated to include a message directing consumers to the new portal, Nasarenko said.
The company is prohibited from using any information collected through the site for marketing purposes, he said.
Ventura County Senior Deputy District Attorney Andrew Reid, a member of Nasarenko’s Consumer Protection Unit, prosecuted the case.
