Boston Restaurant L’Espalier Refuses to Honor Gift Cards; Relevance to Amazon’s Gift Card Racket

I came across a news story in the Boston Globe about the restaurant L’Espalier closing and refusing to honor gift cards. The restaurant isn’t going bankrupt; the owner just decided he was tired of it and wants to start a new restaurant. They announced on 12/26/2018 their last day would be 12/31/2018, only five days later. The restaurant’s PR firm has gone on record saying they won’t offer refunds to gift card holders, the owner has stated the gift cards won’t be valid at his new venture, and anyone who tried to book a table at the end of 2018 did not get to use their gift cards because they were fully booked.

Sean Murphy, author of the Boston Globe article contacted the office of the Attorney General of Massachusetts. Murphy reports: “But the office of Attorney General Maura Healey told me it expects L’Espalier to refund the gift cards, citing the state’s consumer protection law, Chapter 93A, which outlaws ‘unfair and deceptive’ practices by businesses.” Following this, L’Espalier’s PR firm said it will work with the AG’s office to “resolve any complaints amicably.”

Amazon banned my account and stole $451.20 of gift card balance from me in 2015, which I recovered from a law firm representing them, Stoel Rives LLP, in 2016. Amazon’s initial action prompted me to search online, where I found this is a racket they have been conducting since the height of the financial crisis in 2008 (see the thread started 11/12/2008).

It does not appear Amazon has stopped or slowed down. I still get emails and comments every week or two from Amazon customers who have been defrauded. In past writings I have cited the federal CARD Act of 2009, Chapter 19.240 of Washington state’s legal code, Section 1749 of the California Civil Code (in my April 2018 deposition), and Florida’s Deceptive and Unfair Trade Practices Act. All of these laws forbid theft of customer gift card balances, but citing them does not gain much traction with judges, attorneys general, or the general public (recall my shellacking from commentators on, with some even saying I belonged in prison for ripping Amazon off, on a story about Amazon ripping me off for $451.20).

With the L’Espalier story, we see the Massachusetts’s AG office has quite reasonably interpreted the restaurants actions to constitute an “unfair and deceptive” business practice. This is not specific to Massachusetts, however; most states have similar laws which can be applied against Amazon’s practice of closing customer accounts and withholding gift card balances. Even their home state, Washington, has such laws, and federal laws apply as well.

Murphy reports that the PR firm for L’Espalier smugly reiterated the terms of the gift card: “This card is not refundable and has no cash value.” Of course, to anyone with a modicum of legal understanding (or even common decency), this is ludicrous. In my recent deposition for a California small claims suit against Amazon, I pointed out these sentences from the California Civil Code: “The value represented by the gift certificate belongs to the beneficiary, or to the legal representative of the beneficiary to the extent provided by law, and not to the issuer,” and “Any waiver of the provisions of this title is contrary to public policy, and is void and unenforceable.” In most state canons of law and federal law as well, terms like “This card is not refundable and has no cash value” are void and unenforceable when used for the purposes of theft of a gift card balance.

Similarly, Amazon is quite smug when they point out their terms say “Amazon reserves the right to refuse service, terminate accounts, remove or edit content, or cancel orders in its sole discretion” and:

We reserve the right, without notice to you, to void Gift Cards (including as a component of your Balance) without a refund, suspend or terminate customer accounts, suspend or terminate the ability to use our services, cancel or limit orders, and bill alternative forms of payment if we suspect that a Gift Card is obtained, used, or applied to an account (or your Balance is applied to a purchase) fraudulently, unlawfully, or otherwise in violation of these terms and conditions.

These terms are not enforceable and wouldn’t hold up in most courts against many of the customers Amazon has banned. In fact, Amazon should not be allowed to keep the gift card balances at all due to escheatment laws in their home state and many other states. If they are going to count the gift cards they steal as “abandoned” property, they are still required to turn them over to state governments after three years of inactivity in most states. We can be damn sure they are not doing that.

Snarky commentators are quick to point out that if you don’t like the terms, you shouldn’t buy the gift card. But, what about the recipients of gift cards? When suggesting that we just present the original receipt to Amazon, or dispute the purchase of the gift card with our credit card issuer, this assumes we are also the purchaser of the card. Many Americans have poor record-keeping practices and unfortunate financial situations, so they may have purchased the gift card with cash and lost the receipt, even if they purchased the card for themselves. Due to a lack of knowledge, some people think purchasing a gift card with cash and using it on Amazon is safer or more secure than using a bank card directly on Amazon. When they get burned, they not only have no recourse, but a chorus of commentators shaming them for their foolishness and commending Amazon for keeping prices low for everyone while providing tremendous value for their shareholders and chief philandering officer.

Although the same laws apply, in the court of public opinion it is harder to dismiss recipients of L’Espalier gift cards than people who have been banned by Amazon. One can always assume an Amazon customer was banned with good cause; they were stealing from Amazon or programming magnetic strips with stolen credit card information to buy Amazon gift cards at the local gas station. Bostonites, on the other hand, just received L’Espalier gift cards for Christmas that were void by New Year’s Day. Even the snarkiest commentator does not have a retort for that.

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