Coffee Chain Sued in Spat Over Gift Card Cash Redemptions


LOS ANGELES (CNS) - The Starbucks Corp. is being sued by a customer who alleges the coffee shop chain in 2019 wrongfully denied him a $1.70 cash redemption for the balance on his gift card at one of its West Hollywood stores, maintaining the company was obligated to do so by law.

Robert Paskey's Los Angeles Superior Court lawsuit seeks compensatory and punitive damages as well as a court order that Starbucks provide cash redemptions for gift cards having a balance of less than $10.

A Starbucks representative did not immediately reply to a request for comment on the suit filed Thursday.

Paskey went to the location in the 8900 block of Santa Monica Boulevard on Dec. 26 and a clerk there denied him his request for the $1.70 cash redemption on his gift card, telling him the sales software system did not provide for cash redemptions on card balances of less than $10, the suit states.

Other Starbucks stores in California have the same practice and the writing on the back of company's cards states that gift cards are not redeemable for cash “unless otherwise required by law,” the suit states.

“But no relevant laws are identified informing consumers that gift cards with balances of less than $10 are, in fact, redeemable for cash in California,” the suit states.

Paskey is seeking class-action status for his suit. His court papers state that the number of Starbucks gift cards in circulation with balances less than $10 is “quite large.”

The Starbucks website states that cash redemptions for cards with less than a $10 balance can be obtained online, but a request must be made and a wait of seven to 10 days is required, the suit states. However, the policy is not posted in stores or on the back of gift cards so as to better inform patrons, the suit states.

Consumers should not have to undertake “independent online research projects” to determine their rights regarding Starbucks gift cards, according to the suit.

The online cash redemption policy was implemented by Starbucks last September, a month after the expiration of a 2009 injunction issued by a Shasta County judge mandating that customers be permitted to obtain card cash balances of less than $10 in stores and that a notice of their rights be conspicuously posted at the locations, according to the suit.

“It therefore appears that Starbucks will not comply with (the state Civil Code) unless explicitly required to do so by court order...,” the suit states.

Photo: Getty Images

Sponsored Content

Sponsored Content