Chipotle has settled a lawsuit over cashing out gift cards. Here’s how to get a refund

Chipotle fans could have some unexpected cash left on their gift cards after the fast food giants settled a lawsuit.

The beloved Tex-Mex chain has agreed to settle a consumer-protection lawsuit in California after state officials accused them of failing to allow customers to redeem gift cards with balances under $10.

Chipotle, which operates more than 500 restaurants in California, agreed to pay a total of about $246,000 as part of the settlement, authorities announced Thursday.

The payment includes $145,467 in civil penalties, $88,533 to cover investigative costs, and $12,000 in restitution to the California Consumer Protection Prosecution Trust Fund.

Of that amount, a little more than $56,000 will be directed to the Los Angeles County District Attorney’s Office, according to officials.

“Gift cards are real money purchased with hard-earned cash,” Los Angeles County District Attorney Nathan Hochman said. (AP)

Chipotle must also make it easier for customers to get refunds for gift cards with small balances. The company is required to create an online portal where customers in California can request cash refunds for cards with less than $10 remaining. This will initially be available at https://www.chipotle.com/gift-card-cashback.

It must also update new gift cards to clearly state that customers in California have the right to redeem them for cash when the balance falls below $10.

The core allegation focused on California law requiring businesses to allow gift card holders to cash out balances under $10. Prosecutors claimed Chipotle refused to provide cash redemption when a gift card’s remaining value fell below that threshold.

While Chipotle did not admit wrongdoing, it cooperated with the authorities and accepted the settlement terms.

“Gift cards are real money purchased with hard-earned cash,” Los Angeles County District Attorney Nathan Hochman said in a statement about the settlement. “California law is clear that consumers have the right to redeem gift cards with a balance under $10 for cash,” he added.

Rafael Carbajal, Director of the Los Angeles County Department of Consumer and Business Affairs, added, “Consumers are watching every penny in today’s economy and should never have to fight for rights guaranteed under state law. This settlement makes clear that Los Angeles County will hold businesses accountable when they fail to follow consumer laws."

The Independent has reached out to Chipotle for comment.