Chipotle Gift Card Refunds Lawsuit Says Meal Vouchers Are ‘Worthless’

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Chipotle Mexican Grill faces a proposed class action lawsuit over its apparent policy of refusing to refund purchases made with gift cards and instead providing meal vouchers with limitations that make them effectively unusable. 

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The 23-page Chipotle lawsuit relays that the fast casual Mexican food restaurant chain reaps significant revenue from the sale of gift cards, and even more when gift cards are purchased but go unused. In fact, Chipotle has acknowledged that it “earns” hundreds of thousands, and possibly millions, of dollars annually in “breakage” from consumers who have bought gift cards that do not end up being used, the case says. 

In an annual Form 10-K filing with the U.S. Securities and Exchange Commission, Chipotle acknowledged that even minute changes in the “breakage rate,” as small as one or two percent, can help the restaurant pull in millions, the complaint shares. In light of this, Chipotle is “highly motivated” to maximize the gift card breakage rate whenever possible, and has “adopted policies with the purpose and effect of doing so,” the suit alleges. 

“Chipotle’s policy of and practice of refusing to refund Gift Card purchases is not advertised or otherwise conveyed to customers in the course of purchasing Gift Cards,” the filing reads. “On the whole, any reasonable customer purchasing a Gift Card would expect purchases made with the Gift Card would be subject to the same refund policy of purchases made in cash and by other means.” 

When a Chipotle customer complains about the restaurant’s refusal to refund a gift card purchase, Chipotle allows employees to offer meal vouchers that are “worth substantially less than their face value” due to myriad limitations on their use, the lawsuit claims. Specifically, the case says Chipotle meal vouchers generally expire after 30 days, and only a single meal voucher can be used per transaction. Moreover, the meal vouchers do not cover delivery fees and other charges, the suit adds. 

“Chipotle consciously maintains such a policy for the purpose of realizing additional unearned profits without cost,” the complaint surmises. 

The lawsuit goes on to call “a farce” Chipotle’s claim that it is unable to refund gift cards, particularly in that it is “facially implausible” the restaurant chain lacks the ability to credit gift cards, each of which comes with its own tracking number. 

The case looks to cover anyone in the United States who, during the applicable statute of limitations period, made a purchase from Chipotle and was denied a refund because their purchase was made with a gift card. 

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