Sears Settles With New York Over Deceptive Refunds

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For more than two years, Sears offered “Come Back Cash” promotions that rewarded customers with Sears gift cards for purchases over certain qualifying thresholds. But if a customer returned an item, they would have the proportionate value of that gift card deducted from the refund, even if the total value of the purchase was still above the threshold for meriting a gift card.

So say the deal was a $10 gift card for clothing purchases over $50. You bought a pair of jeans and some socks that totaled $75 and walked away with that lovely gift card. But then you realized you didn’t need so many new socks, so you returned one $10 pair to the store. Even though the value of your total purchase was still $65 — well over the limit for earning the gift card — Sears still deducted $1.33 card from your refund.

What’s worse, the gift cards sometimes expired in as few as eight days, but you could return items to Sears for refunds well past that time period. So even if your gift card had long since expired by the time you returned those socks, Sears still deducted the full amount of the card.

We heard about problems related to this promotion, including this story from 2011, and the office of NY AG Eric T. Schneiderman began looking into the refund policy after receiving a complaint from a consumer who purchased seven items with a total value of $164.65, qualifying her for a $10 gift card. The customer later returned three items totaling $29.97, leaving her total purchases at $134.68, still well above the $50 qualifying threshold. Regardless, Sears deducted $3.67 from the refund.

In response to the AG’s investigation, Sears stopped this policy in October 2012, but Schneiderman’s office calculates that the retailer shortchanged New York shoppers $82,825 before getting rid of the promotion.

As a penalty, Sears will pay $150,000 in fines and has agreed to the following stipulations regarding similar promotions going forward:

*Sears shall not reduce the refund to any consumer who returns merchandise, if, after the return, the total purchase price remains at or above the qualifying threshold of the promotion that originally qualified the consumer for the award card;

*Sears shall clearly disclose, in all relevant promotional materials and advertising, that refunds will be reduced only if the purchase price falls below the qualifying threshold amount; and

*Sears shall not reduce the refund of any consumer whose award card was unused and expired by the time of the return.

“This settlement ensures that consumers who participate in a promotion of this type and later return merchandise will receive a full and fair refund – and not a penny less,” Attorney General Schneiderman said. “Sears’ refund policy improperly reduced refunds to customers whose purchases stayed above the qualifying threshold in the promotion, or whose promotional award card had already expired without being used.”