Hold onto your Starbucks’ cards. According to Melissa Landau Steinmann and Erin Warren of Venable, a whistleblower case involving unclaimed gift cards has been unsealed in Delaware now that state prosecutors investigated it and joined on this March. And it’s likely there could be big ramifications for the industry, depending on the outcome.
The case was originally filed last year by a former officer of Card Compliant LLC, claiming the defendant failed to report the value of unredeemed gift card balances, thus violating the Delaware False Claims and Reporting Act. It’s alleged the company created an entire gift card avoidance scheme “in an effort to deprive the State of Delaware of hundreds of millions of dollars due to the State under its unclaimed and abandoned property laws,” say the authors.
