H&M will pay $36 million to settle claims over unused gift cards
Fashion retailer H&M will pay $36 million to settle allegations that it illegally pocketed millions of dollars in unused gift card balances, New York Attorney General Letitia James said Thursday.
Since at least 2008, the Swedish company has illegally held more than $18 million in unused gift card balances in H&M’s bank accounts, rather than sending them to the state’s Abandoned Assets Fund, according to James. H&M then repeatedly misled authorities about the missing money by blaming an Ohio company that oversaw its gift card business, she added.
“My office has zero tolerance for companies that break the law and line their pockets with money that belongs to hard-working people,” James said in a statement. statement. “Breaking the law is not fashionable or tolerable.”
H&M will pay $28.26 million to New York City and $7.74 million to whistleblower William French, lawyer says deposit. French sued the retailer in 2016, accusing H&M of violating New York’s False Claims Act and an abandoned property law.
H&M neither admitted nor denied wrongdoing in the settlement.
In an emailed statement, H&M said it disagreed with “many characterizations regarding our alleged conduct”, but cooperated with investigators and agreed to resolve the issue. “No H&M customer gift cards have been or will be affected by this settlement, as H&M has and will continue to offer gift cards with no expiry date,” he said.
Stockholm-based H&M operates around 4,800 stores worldwide and generated $20.1 billion in revenue last year, according to its website.
Consumers with unused balances on gift cards issued by H&M between 2004 and 2014 can use the card or file a claim here.
are never redeemed and around $3 billion in gift cards went unspent in 2020, according to one estimate.
Gift cards are also a vehicle for crooks: Any entity that asks to be paid “by putting money on a gift card” is doing something devious, according to the Federal Trade Commission.