Taco Bell to pay $85,000 to settle lawsuit over gift card redemption

Taco Bell will pay $85,500 to settle a lawsuit filed by prosecutors in three counties alleging the Irvine-based fast-food chain violated state law by refusing to allow customers to cash in gift cards with a remaining balance of less than $10.

The legal action was brought by district attorney’s offices in Los Angeles, Ventura and Sonoma counties, with the case handled in Ventura County.

“Businesses have a responsibility to honor their customers’ gift cards, regardless of the amount,” Los Angeles County District Attorney George Gascón said in a statement. “This settlement sends a clear message that companies like Taco Bell must abide by the law and treat their customers fairly.”

According to Gascón’s office, California law allows customers to receive cash refunds for gift cards with a balance of less than $10. Prosecutors alleged that Taco Bell failed to abide by that law, and denied customers’ requests for refunds.

Taco Bell did not admit any wrongdoing in settling the complaint. Representatives for the company did not immediately respond to a request for comment.

The company will pay $45,000 in penalties, $30,500 in investigative costs and $10,000 to the California Consumer Protection Prosecution Trust Fund, according to Gascón’s office. Taco Bell will also be required to post a visible notice on cash registers at its locations, notifying customers of their right to redeem the gift cards. 

The company’s gift cards additionally will be required to include a link to the company’s redemption policy on its website, and annual training must be provided to store managers, according to Gascón’s office.

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