Schneiderman announces settlement with Sears over refund policy

September 12, 2013 NYS Attorney General’s Office
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New York State Attorney General Eric T. Schneiderman on Thursday announced that his office has reached a settlement with Sears, Roebuck and Co. over a deceptive refund policy that the retailer applied to consumers who participated in its “Come Back Cash” promotion. 

In the promotion, a consumer who purchased merchandise above a “qualifying threshold” amount was given a $10 or $20 promotional award card. However, if the consumer later returned some of the merchandise, Sears reduced the refund by a pro-rated amount of the value of the award card, even if the cost of the unreturned merchandise remained above the qualifying threshold and/or if the customer did not cash in the award.

The company has agreed to pay $150,000 in fines and has already reformed the policy. The multi-national retailer, headquartered in Hoffman Estates, Illinois, operates 45 stores in New York.

“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.”

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The Attorney General’s investigation revealed that there were a total of 25,998 transactions involving New York consumers whose refunds were improperly reduced and that Sears reduced the refunds issued to those consumers in the total amount of $82,825.62.

The Attorney General’s investigation was triggered by a complaint from a consumer who purchased seven items at the Sears in White Plains totaling $164.65.  This qualified the consumer for $10 award card. The consumer later returned three items totaling $29.97, leaving her total purchases at $134.68 — well above the $50 qualifying threshold.  Nonetheless, Sears deducted $3.67 from the refund and returned only $26.30 to the consumer.

Sears cooperated fully with the Attorney General’s investigation and changed its return policy prior to reaching a formal settlement with the Attorney General.  

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