Chipotle Mexican Grill has agreed to pay $246,000 to settle a consumer protection lawsuit alleging that it wouldn't allow California customers to cash out gift cards with a balance of under $10, authorities announced Thursday.
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The restaurant chain -- which has more than 500 locations in California and denied any wrongdoing -- will pay $145,467 in civil penalties, $88,533 for investigative costs and $12,000 restitution to the California Consumer Protection Prosecution Trust Fund, with just over $56,000 going to the Los Angeles County District Attorney's Office, authorities said.
The settlement also requires the company to create and maintain a website portal, initially accessible at chipotle.com/gift-card-cashback, where customers can request a refund for a Chipotle gift card with a balance under $10 and ensure that its new gift certificates contain an updated notice alerting customers that they may redeem the gift card for cash when its value drops below $10, according to the County of Los Angeles Department of Consumer and Business Affairs.
"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."
The lawsuit was led by the Ventura County District Attorney's Office, with assistance from the district attorney's offices of Los Angeles, Shasta and Sonoma counties, along with Los Angeles County's Department of Consumer and Business Affairs.
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