TJX Judge: Consumers Selling Vouchers Wont Cut It

 
 
By Evan Schuman  |  Posted 2007-10-04 Email Print this article Print
 
 
 
 
 
 
 

A U.S. District Court judge says the idea puts too much of the burden on the consumers.

When U.S. District Court Judge William G. Young told lawyers Sept. 27 that he had serious concerns about the proposed TJX settlement, he also took issue with the part that would allow for consumers to turn the vouchers into cash by selling them. In a courtroom exchange, TJX attorney Harvey J. Wolkoff argued that there is an easy way for a consumer to turn the vouchers into cash.
"These vouchers are fully transferable, so that someone can take a $30 voucher and sell it on eBay—Ive never done it myself—and get $25," Wolkoff said.
Replied Young: "Too hard for me, Mr. Wolkoff. Too hard for me. These are consumers. People know how to cash checks. Saying, Go to eBay and negotiate it wont cut it." As was already reported, the judge told the lawyers that he wanted to know about the true costs of the vouchers to TJX. But Young elaborated on his explanation. "I assume that this voucher has a value, a genuine value. That is, if you come and you give your $30 voucher to TJX, theyll take $30 off something they have on sale and if its on sale, you can get another $30 off and you walk out with it," the judge said. "But thats not a $30 cost to TJX because theyre selling things at a profit, as is their perfect right."
Regardless of the cost, Young was clear that he wasnt happy with the vouchers. "Im very troubled by the vouchers, even if they are legal. I really dont like the vouchers the way they stand now," he said. "One imagines that there are a number of people out there who have been discommoded and, however TJX would wish it, theyre not too happy with TJX." Click here to read more about the TJX settlement. To make sure that he had the plaintiff attorneys attention, Young hinted that he wanted to tie the true value of the vouchers to legal fees he was prepared to approve. The current settlement has set aside about $6.5 million for the fees for plaintiff attorneys. "I will approve a [lawyers fee] settlement that is commensurate and does not exceed an appropriate proportion of the actual money that is either transferred to consumers, actually transferred to consumers, or the value of the cost of insurance, insurance which is transferred to consumers," Young said. "But Im not just awarding this and not knowing what consumers in terms of actual money have gotten out of this." Assuming that Youngs position will be similar to other jurists overseeing similar matters, retailers might want to take notice of this comment. He wants every customer whose data was breached to be individually contacted about the settlement. "While Im perfectly fine with having ads in consumer magazines and the like, I had thought that TJX knows exactly which cards have been compromised and … has information as to the consumer whose name is on that card," Young said. "I want those consumers, every single one of them, I want them to be mailed the notices having to do with the settlement." Another detail that emerged from the hearing was that Young concluded that he doesnt have the authority to approve any deal of this kind in total because some of the consumers suing TJX are based in Canada. "The way you have resolved this is to seek a really greater than a nationwide class, though what I decide could only bind a nationwide class. The courts of Canada will have to decide whatever they decide," he said. Young did have an optimistic comment. He interpreted the lack of monetary consumer damages as an indication that the U.S. retail card system is working well. "When I look at this settlement agreement—and I have reviewed it carefully—one of the institutional things that Im struck with is how well the credit card system works in the United States. That is to say from the consumers point of view, … Im not in any way diminishing the discomfort and inconvenience and uncertainty that has been visited, apparently, on lots of consumers, but no one has lost big money here because the banks pick up … the actual damages. And thats interesting and I think informative." Retail Center Editor Evan Schuman can be reached at Evan.Schuman@ziffdavisenterprise.com. Check out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.
 
 
 
 
Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.
 
 
 
 
 
 
 

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