NEW YORK (AP) -- New York's attorney general said Thursday that the state has reached a $150,000 settlement with Sears Holdings Corp. over its "Come Back Cash" promotion.
Attorney General Eric Schneiderman said the promotion, which ran from August 2010 to October 2012, awarded Sears customers a $10 or $20 award card, depending on how much money they spent. The card could only be used the next time the customer shops at Sears and expired between eight and 15 days after the date of purchase.
If a customer returned a part of their purchase, Schneiderman said, Sears would reduce the amount of money refunded, even if the customer never used the award card and the purchase price never fell below the qualifying amount. Schneiderman called the refund policy "deceptive."
Sears has agreed to pay the $150,000 in fines to New York state and has changed its policy, Schneiderman said. Affected customers will not be getting their money back.
"This settlement ensures that consumers who participate in a promotion of this type and later return merchandise will receive a full and fair refund, and not a penny less," Schneiderman said in a statement.
Sears said in an emailed statement that it "never agreed that it engaged in wrongdoing," and settled with the state so that it could "focus its efforts and resources on serving its members rather than engaging in protracted litigation."
The attorney general said that there were 25,998 transactions involving New York consumers who had their refunds reduced. Those reduced refunds totaled $82,825.62.
The investigation began after a complaint from a consumer who bought seven items for $164.65 at a Sears in White Plains, N.Y., Schneiderman said. Since the purchase price was above $50, the customer was qualified to receive a $10 reward card. The customer later returned three items, totaling $29.97, but was only refunded $26.30. Since the purchase price didn't fall below $50, the customer still qualified for the $10 award card and shouldn't have had the refund reduced, Schneiderman said.
Under the settlement, Sears can only reduce the amount of money refunded to customer if the purchase price falls below the qualifying amount after a return. All advertising material needs to clearly state that, Schneiderman said. Also, Sears can't reduce refunds if the award card isn't used and expired at the time of the return.