With more than half of all gift cards sold in the fourth quarter alone, the latest round of lawsuits is a big wake-up call for many retailers that issue gift cards.
Last week, on October 24, 2019, a well-known plaintiff’s class-action law firm sued dozens of gift card issuers because their gift cards allegedly did not comply with the Americans With Disabilities Act (ADA) and two other similar New York state laws.
Specifically, the lawsuit says that the gift cards did not contain braille print, and thus discriminated against visually impaired individuals.
Does the Lack of Braille on Gift Cards Constitute Discrimination?
There is no case law specifically on point to determine whether braille is required on gift cards as an accommodation to those that are blind or visually impaired.
The ADA regulations require that businesses “take those steps that may be necessary to ensure that no individual with a disability is excluded, denied services, segregated or otherwise treated differently than other individuals because of the absence of auxiliary aids and services.” 28 C.F.R. § 36.303(a).
The US Department of Justice allows retailers certain discretion “to choose among various alternatives as long as the result is effective communication.” 28 C.F.R § Pt. 36, App. C
In the examples that are provided in Appendix C, employees of the business can read aloud the information to the person with a disability. Waiters would be able to read the menu out loud to the patron, and sales personnel can read the information on a clothing tag.
Another issue, even if braille would otherwise be required, is the cost of embossing gift cards in braille.
The regulation goes on to provide an exception – if the steps would fundamentally alter the nature of the goods or would result in an undue burden, which includes significant difficulty or expense.
One thing to note, the law firm that is filing these lawsuits has been successful in arguing that websites must be ADA compliant. It appears that gift cards are their next target.
What’s Next for Retailers?
Gift cards have come under attack on a variety of fronts – from state unclaimed property authorities and whistleblower claims to cash back redemption claims.
And why not?
With a market of over $400 billion in 2019 (according to the lawsuits), there’s an attractive pot of money for retailers, consumers, and others, like plaintiff class action lawyers.
But that doesn’t mean that gift cards are dead or even threatened. There is just risk that you must manage to have a successful gift card program.
If you are managing a gift card program, now is a great time to review your program to ensure that you are compliant.
- Are you compliant with the Federal CARD Act on expiration dates, fees, and more?
- Are you compliant with revenue recognition for gift card breakage?
- Are you compliant with state unclaimed property laws and regulations (especially in light of the Delaware whistleblower cases)?
- Are you compliant with state cash redemption requirements?
- Are you compliant with the ADA requirements?
- Are you properly accounting for promotional cards, un-receipted returns, and other customer accommodation cards?
Contact Kimberly DeCarrera at DeCarrera Law, LLC to discuss how we can help you manage the risk from your gift card program.
Continual monitoring and correction is key to properly managing the risk that is associated with gift and other prepaid cards.