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.
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. The lawsuits soon expanded to California as well.
Specifically, the lawsuits say that the gift cards did not contain Braille print, and thus discriminated against visually impaired individuals.
On April 23, 2020, the U.S. District Court of the Southern District of New York said that retailers do not have to provide Braille on gift cards.
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.
Retailers Do Not Have to Provide Braille Gift Cards to Accommodate the Blind Under the ADA
Updated April 28, 2020: Yovanny Dominguez v. Banana Republic, LLC
In the first case to move forward, a Federal Court in New York ruled that at least one retailer did not have to provide Braille on gift cards.
Judge Gregory H. Woods noted the flood of litigation and that the “all-too-generic complaint” fails partly because the plaintiff did not show that he ever intended to return to the place that offered the discrimination and thus was not injured by the retailer’s lack of accommodation. Judge Woods even noted a line from Mendez v. Apple Inc in the “those who live by the photocopier shall die by the photocopier” in explaining the lack of standing in this case.
Showing his disdain for the current litigation, Judge Woods offered the following commentary, in the conclusion of the opinion:
“Computers have made a lot of things in life easier. Copy-and-paste litigation is one of them. The pitfalls of such an approach is evident here where, among other things, lLaintiff’s opposition responds to arguments never made by its opponent in its motion and failed to even correctly identify what the Defendant sells. See, e.g., Opp’n at 3, 15, 16, 20 (referring to Banana Republic as a “food establishment”). Although it features the fruit in its name, Banana Republic does not sell bananas.
Judge Woods went on to discuss more of the merits of the case, the ADA in respect to gift cards. He concluded that the retailer did not violate Title III by failing to stock Braille gift cards. Woods concluded that gift cards are a type of merchandise, not a place of public accommodation.. Further, a store is not required under the ADA to provision different goods or services, only that a person is not prohibited from entering the store.
“Put differently, a consumer can make a purchase with a gift card, but not on or in a gift card.
Further, stores are able to choose the auxiliary aid of their choosing, no specific aid is required by the ADA. In this case, Woods noted that the plaintiff did not inquire about auxiliary aids and knows nothing of the range of such aids that Banana Republic offers the visually impaired.
As a word of caution, Judge Woods did say the following:
“To be clear, there is no doubt that Plaintiff alleges that he was denied a Braille or otherwise accessible gift card. And it is possible that only a fully accessible gift card could provide the effective communication necessary pursuant to Title III. But Plaintiff never tried to discover whether that was the case here. Thus, as a matter of law, his claim fails.”
In other words, a properly pleaded complaint may survive if it was more than just “conclusory statements.” However, in a footnote, Woods acknowledged that while theoretically possible, it is improbable that Braille would be required due to space constraints alone. Due to the size of Braille characters, a standard credit card size gift card could only hold 55 to 70 Braille characters at most.
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.