Recent Bulletins

Can You Put an Expiration Date … May 31st, 2011

May 31, 2011 – on a pre-paid voucher for goods and services? For now, we think it is not advisable…

Numerous lawsuits against Groupon raise the question of the applicability of state and federal gift certificate/gift card laws to non-traditional gift certificates/cards, such as pre-paid vouchers like Groupon vouchers.

There are at least 9 cases pending against Groupon, and the key issue is whether the Groupon voucher is a gift certificate/gift card – which might vary by state/federal statutory definition. If the Groupon voucher is determined to be a gift certificate/gift card, then Groupon may be in violation of the applicable law’s prohibition or restriction on expiration dates.

Interestingly, these lawsuits are being filed even though Groupon has a policy that once the Groupon voucher expires, the retailer must honor the Groupon voucher for the value paid, as required by applicable law (for instance, Illinois law prohibits expiration of gift certificates for 5 years). For example, on June 1, 2011 you bought a Groupon voucher for $5.00 that gives admission to an Illinois museum anytime until August 31, 2011. The normal museum admission fee is $15. If you go to the museum after August 31, 2011, but before June 1, 2016, the museum could deny your entry to the museum with the voucher, but under the Groupon policy, the museum should deduct $5 from the regular admission fee (thus you tender your Groupon certificate plus $10 to gain entry to the museum). Essentially, the Groupon policy is meant to permit the “bargain” to expire, but ensure that you do not lose the original amount you paid. If the establishment refuses to honor the purchase price, Groupon’s current policy is that it will refund the purchase price to you directly.

In addition, Groupon currently has a customer-friendly refund policy that states that Groupon will refund your purchase price if you are unsatisfied with your Groupon experience for any reason.

And yet, in the face of all these Groupon policies, the lawsuits continue.

In light of the lack of clarity on the applicability of many of the gift certificate/gift card laws to pre-paid vouchers, until case law or statutory updates clarifiy the definition of gift certificates or gift cards, we advise against using expiration dates that would violate the applicable laws for gift certificates and gift cards.

If You Happen to be in Oslo This Week… February 8th, 2011

February 8, 2011 — . . . be sure to visit the Nobel Peace Center for a special exhibition of Congo/Women, a collection of photographs highlighting the gender-based violence faced by girls and women in the Democratic Republic of Congo. Congo/Women, which has previously exhibited at the US House and Senate, the UK Parliament’s House of Commons, and the UN in Geneva and New York, is a project of Friedman Law Group’s pro bono client, Art Works Project (AWP). AWP uses design and the arts to raise awareness of significant human rights and environmental issues. For more information about AWP, Congo/Women and other AWP projects (or to make a donation), please visit www.artworksprojects.org.

Grace Period for Gift Card Disclosures Now Over February 8th, 2011

February 8, 2011 — In order to avoid the destruction of over 100 million gift cards that failed to meet the requirements of the 2009 Credit Card Responsibility and Disclosure (CARD) Act, last July Congress passed the ECO-Gift Card Act. For gift cards produced prior to April 1, 2010, the ECO-Gift Card Act extended the effective date for certain mandated disclosures from August 22, 2010 to January 31, 2011.  Now that the delayed effective date has been reached, gift cards, regardless of the date of production, must be in full compliance with all applicable requirements of the CARD Act and the Federal Reserve’s rule implementing the CARD Act.

Brace for Increased Consumer False Advertising Suits in Wake of Recent California Supreme Court Opinion February 8th, 2011

February 8, 2011 — “Simply stated: labels matter.” So reasoned the California Supreme Court in a recent opinion that will undoubtedly result in an increase in the number of unfair competition and false advertising suits in California.

The Court held that consumers who purchase a product in reliance on a false claim have standing to sue the manufacturer under California’s unfair competition and false advertising laws, even if the product was not defective, overpriced or of inferior quality.  Kwikset Corporation v. Superior Court of Orange County, No. S171845 (Cal. Sup. Ct. Jan. 27, 2011).  Read the rest of this entry »

False Endorsement or Protected Speech? Risks of Using Celebrity “News” in Advertising January 23rd, 2009

January 23, 2009 — Two recent disputes involving high-profile music entertainers highlight the controversy over advertising strategies intended to capitalize on current events or celebrity “infotainment.” Read the rest of this entry »

What’s the Deal with Text Message Promotions? October 18th, 2007

October 18, 2007 — Recent filings in Georgia and California call into question the legitimacy of text messaging promotions in the entertainment industry.In May 2007, a class action complaint was filed in California against Endemol USA, Inc., NBC Universal, Inc., Don Jagoda Associates, Inc. and other involved in the Lucky Case Game, a promotion featured during the NBC television program Deal or No Deal. Read the rest of this entry »

FTC Enters Gift Card Arena September 4th, 2007

September 4, 2007 — In the first Federal Trade Commission (FTC) enforcement action involving gift cards, Kmart Corporation was charged with deceptive practices in the advertising and sale of gift cards. Kmart has agreed to modify the way it markets its cards. Read the rest of this entry »