Ralphs Grocery Co. will give hotel vouchers to thousands of consumers to settle a California lawsuit over its spring 2003 Great Escape promotion.
The promo offered a two-night hotel voucher to Ralphs Club shoppers who spent more than $400 between June 4 and July 15, 2003 (January 2004 PROMO). But Ralphs canceled the promo in October when it was overwhelmed by more than 300,000 participants.
Those customers got “reservation redemption certificates” asking them to choose three travel dates for a Marriott, Marriott Courtyard or Ramada Inns hotel in one of 38 cities. But many were unable to redeem the certificates because of blackout dates and limited availability of rooms.
More than 50,000 shoppers got a letter saying Ralphs’ travel fulfillment service, Torrance, CA-based Travel Services, was unable to fulfill any of the dates. Ralphs then offered shoppers $50 and $100 discounts at Marriott or Renaissance hotels on the condition that shoppers sign a waiver against suing the grocer.
The class-action suit was filed by California’s attorney general. As part of the settlement, Los Angeles-based Ralphs will give “Marriott Flex Awards,” a two-night stay in any Marriott-owned or operated hotel, to all Ralphs customers who applied and met the Great Escape requirements but did not receive their award. (Consumers who accepted the $50 or $100 vouchers are still eligible for Flex Awards.)
Ralphs also will pay $125,000 in civil penalties and $100,000 to reimburse investigative costs incurred by the office of the attorney general.
Ralphs also agreed to “adequately investigate the ability of third parties with whom Ralphs contracts to fulfill the store’s obligation to provide advertised travel,” according to the settlement.
Ralphs has sued Travel Services, which also does business as Planet Multimedia and Creative Services Group, according to the attorney general’s office. Travel Services was not a party in the AG’s suit.
Ralphs also agreed that future travel promotions will disclose in a “clear and conspicuous manner” all terms and restrictions, and provide travel to all applicants who qualify. The settlement also forbids Ralphs from requiring customers to waive their legal rights if Ralphs hasn’t provided at least the level of travel originally advertised.
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