Chipotle class action claims company won’t refund orders paid with gift cards

Chipotle class action overview: 

• Who: Chipotle is facing a class action lawsuit over its gift card refund practices.
• Why: Chipotle does not refund purchases made with gift cards, even if the food is not delivered and has separate gift card policies, the Chipotle refund lawsuit says.
• Where: The Chipotle gift cards lawsuit was filed in federal court in California.

A new Chipotle class action claims the company’s policy of denying refunds for orders paid for with gift cards is a violation of several deceptive trade laws.

Chipotle gift cards are advertised as being the same as cash; however, the company refuses to issue refunds for gift card purchases in the same way it would for cash or card purchases, the Chipotle class action claims.

Instead, according to the lawsuit, Chipotle offers meal vouchers to customers who seek refunds — vouchers that the lawsuit claims are worthless because they have limitations such as expiring after 30 days and can’t be used to pay for delivery costs.

“Chipotle’s policy of and practice of refusing to refund gift card purchases is not advertised or otherwise conveyed to customers in the course of purchasing gift cards,” the Chipotle refund lawsuit says.

The company’s policy for Chipotle gift cards violates various federal, California and Wisconsin laws, the lawsuit claims.

Chipotle refund lawsuit: Company makes money on unused gift card funds

Chipotle earns “hundreds of thousands, if not millions” each year when customers purchase gift cards and do not fully use them. Any change in the current gift card breakage rate would have a significant impact on the company’s bottom line, the Chipotle class action claims.

“A relative decrease of 100 basis points to our gift card breakage rate would have resulted in a reduction of food and beverage revenue on our consolidated statement of income and comprehensive income of approximately $0.6 million for the year ended December 31, 2023,” Chipotle wrote in its annual report, according to the class action.

A federal judge in Pennsylvania wouldn’t certify a class action lawsuit that alleged Chipotle failed to provide its customers with exact change amid a nationwide coin shortage during the COVID-19 pandemic.

Have you tried to get a refund on a Chipotle gift card? Let us know in the comments.

The plaintiff is represented by Alex R. Straus of Milberg Coleman Bryson Phillips Grossman PLLC.

The Chipotle class action lawsuit is Terry v. Chipotle Mexican Grill Inc., Case No. 8:24-cv-00354, in the U.S. District Court for the Central District of California Southern Division.

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