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Minnesota Court Reverses Grant of Motion to Dismiss Class Action Alleging that Car Wash Receipts Constitute Gift Cards
By Daniel Garner on October 30, 2013 at 2:24 PM

In Wells v. Holiday Companies, Inc., No. A12–1476, 2013 WL 777384 (Minn. Ct. App. 2013), the Minnesota Court of Appeals reversed an order granting a motion to dismiss a class action lawsuit alleging that car wash receipts constitute gift cards that cannot expire under state law.

Under Minnesota state law, gift certificates and gift cards cannot expire. In this case, when a customer purchased a car wash, the defendant convenience store printed a receipt that stated the price of the car wash and the fact that the car wash ticket was “good for 30 days.” The named plaintiff filed a class action lawsuit alleging that the ticket constituted a “gift card” under Minnesota state law, and therefore could not expire.

After the trial court granted the convenience store’s motion to dismiss, the plaintiff appealed, and the state appellate court reversed. The appellate court found that upon review of the requirements of Minnesota state law, the car wash receipt could constitute a “gift certificate” because it was a (1) tangible record, (2) promising that good or services would be provided, (3) made for consideration, (4) to the value shown in the record (i.e., for a specific amount of value/money). The court then remanded the case to the state trial court for further proceedings.

This case highlights the fact that under both state and federal law, a “gift card” is not necessarily limited to the traditional understanding of a plastic card that states the phrase “gift card” on the front. Instead, there is a possibility in many states and under the federal gift card law (Regulation E) that any tangible record (card, receipt, certificate, etc.) that stores value or represents money a consumer paid might be a “gift card” for legal purposes. Thus, retailers should be careful to ensure that any tangible record that they issue entitling a customer to goods or services – such as coupons, tickets, etc. – does not constitute a “gift card” before they allow those items to expire.

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