Staples Rewards Class Action Reaches Quick $2M Settlement

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Parties to a Staples Rewards class action lawsuit have agreed on a proposed settlement only a few days after the complaint was filed.

Plaintiff Neil Torczyner presented the proposed settlement for court approval last Wednesday. The settlement would require Staples to pay $2 million to resolve allegations by Torczyner that the company under-credited customers’ Staples Rewards accounts by misapplying coupons.

Under terms of the proposed settlement, Staples will make a payment of $10 to each affected Class Member who files a valid claim. Torczyner says with actual damages estimated at $2 per Class Member, the settlement gives claimants a good value. For acting as lead plaintiff, Torczyner would receive a $5,000 incentive award under the settlement.

A fairness hearing is scheduled for March of next year.

The proposed settlement comes just over a week after Torczyner filed his Staples Rewards class action lawsuit. Torczyner accused Staples of manipulating the way it applies coupons so that customers would get less credit than they were entitled to under the Staples Rewards program.

According to Torczyner, Staples Rewards is a customer incentive program that allows customers to build credit towards future purchases by buying certain qualifying items. Credit is calculated as a percentage of the dollar amount of qualifying purchases.

Torczyner claimed Staples had been partially applying coupons for non-qualifying merchandise to the purchase price of qualifying goods. By applying the coupon discount pro rata across the customer’s entire purchase, instead of only to the item the coupon was intended for, Staples allegedly reduced the amount customers spent on qualifying items – and with that, their Staples Rewards credit.

Torczyner says he noticed a discrepancy in February 2013 when he used a $1.50 coupon for bottled water in a purchase of mixed qualifying and non-qualifying items. His register receipt showed the coupon was applied to the price of the bottled water only.

However, when he checked his Staples Rewards account online, he saw that for rewards program purposes the company applied the coupon to all items in that purchase. That application reduced the credit he got for his qualifying purchases, he claims.

Although the court action didn’t begin until this month, Torczyner says it was the result of over two years of pre-litigation negotiation and exchange of evidence by the parties.

Torczyner first raised the issue with Staples in a letter from March 2013. Both parties agreed to postpone formal legal action while they engaged in their own negotiations and discovery.

That discovery apparently revealed that while 28 million customers use Staples Rewards, the number of customers actually affected by the alleged miscalculation is significantly smaller – leaving fewer Class Members to distribute settlement funds to.

Torczyner and his proposed Class are represented by David R. Stickney of Bernstein Litowitz Berger & Grossmann LLP and by Frank R. Schirripa and Michael A. Rose of Hach Rose Schirripa & Cheverie LLP.

The Staples Rewards Miscalculation Class Action Lawsuit is Neil Torczyner v. Staples Inc., Case No. 3:16-cv-02965, in the U.S. District Court for the Southern District of California.

UPDATE: The Staples Rewards Class Action Settlement is now open! Click here to file a claim. 

UPDATE 2: On March 8, 2018, Top Class Actions viewers who filed a claim for the Staples Rewards class action settlement started receiving $10 coupon codes via email. Congratulations to everyone who filed a claim and got PAID!