REI Class Action Says Gift Cards Expire Before 5 Years

REI gift cards may expire earlier than 5 years after issue date, according to a recent class action lawsuit.

REI, an outdoor company headquartered in Washington state, is unique because it is owned by its members.

For a fee, customers can purchase a membership with the store. Each year, members receive a “dividend” from the store as part of the company’s annual profits.

This is different from rewards from purchases that members might earn by using REI credit cards.

The dividend is reportedly issues to members in the form of a gift card, but plaintiffs Jourey Newell and Felipe Machado claim that the gift card expires earlier than is legally allowed.

In 2016, Newell was reportedly issued a dividend by REI in the form of a gift card. Newell says his gift card expired in early 2018 meaning that he was “deprived” of the amount on the gift card.

Machado makes similar complaints. In 2017, he claims to have been issued a gift card for his dividend share. However, in early 2019 the gift card allegedly expired.

“Most importantly, the gift cards expire earlier than 5 years after the date on which the gift cards are issued, or the date on which funds are last loaded to the gift cards,” the REI gift card class action claims. “In fact, every year, on a single day in January every member gift card issued 2 years prior expires. (For example, in January 2019 every gift card REI issued in March 2017 expired.)”

Newell and Machado argue that this early expiration date is a violation of federal law.

In 1978, Congress passed the Electronic Fund Transfer Act (EFTA) to protect consumers by “providing a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic funds transfer systems.” This law was expanded in 2009 by the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act.

The CARD Act amended the EFTA to include protections regarding the purchase of gift cards and other prepaid cards. Part of the protections offered by the act include restrictions on expiration dates.

Under the CARD Act, companies can not issue a gift card with an expiration date earlier than five years after the issue date or the date when funds were last loaded on a gift card.

Newell and Machado claim that REI violates these federal laws by issuing gift cards with early expiration dates.

Numerous REI members have allegedly complained of this early gift card expiration, prompting Newell and Machado to file a class action lawsuit regarding the issue.

Newell and Machado seek to represent a Class of REI members who were issued a dividend in the form of a gift card and whose gift card expired early.

The REI gift card class action lawsuit seeks actual damages, trebled actual damages, statutory damages, court costs, and attorneys’ fees.

Newell and Machado are represented by Samuel J. Strauss of Turke & Strauss LLP.

The REI Gift Card Class Action Lawsuit is Newell, et al. v. Recreational Equipment Inc., Case No 2:19-cv-00662, in the U.S. District Court for the Western District of Washington.

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