Late last week, a class action lawsuit was filed in California state court against AutoZone. The case was filed pursuant to AutoZone’s rewards program.  According to the complaint, AutoZone’s loyalty program provides consumers with a “reward credit” for each purchase they make over $20.  After five credits, consumers would allegedly receive a $20 reward, which they could use for AutoZone purchases.  The plaintiffs allege that AutoZone subsequently created an expiration policy – noting that the reward credits accumulated expire after 12 months and the $20 reward expires after three months.  AutoZone, according to the complaint, did not adequately disclose the change to its program.  The plaintiffs, among other claims, are alleging breach of contract and violations of the California False Advertising Act and Unfair Competition Law.

TAKEAWAY:  Many advertisers are well-aware that state and federal laws expressly permit expiration dates on gift cards received in connection with loyalty programs.  However, companies that wish to start applying expiration dates to certain gift cards should take care to clearly and conspicuously communicate such changes to their members.