Consumers don't keep their receipts. This poses a unique
challenge in consumer product class actions, especially when
parties seek the Court's approval of a settlement that requires
a receipt as proof of purchase. And if the settlement doesn't
require a receipt, what proof of purchase does it ask for? By the
time a settlement is reached, how likely is it that consumers will
accurately remember the dates and quantities of their purchases or
how much they spent?
No Receipt, No Class Action: The U.S. Skinnygirl Margarita
In June 2014, a federal district court in New Jersey denied
certification to a putative class action brought on behalf of
purchasers of the popular drink mix, Skinnygirl Margarita. The
plaintiffs alleged that they purchased the product on the basis of
false and misleading "all natural" and health claims
featured on the product's label. In denying certification, the
Court held that there was no reliable way to ascertain whether an
individual belonged in the class, saying:
Without any independently
verifiable proof of purchase through receipts, retail records, or
Court finds it unlikely that putative class members will accurately
remember every Skinnygirl Margarita purchase they made
during the class period, let alone where these purchases were made
and the prices they paid each time. Given the general inaccuracies
of individuals' memories, the submission of affidavits
supplying such information would be very likely to invite
speculation, or worse, not to mention that this process
would result in an extremely burdensome task for the Court or a
claims administrator attempting to verify class members'
claims. [emphasis added]
The Court refused to rely on each individual purchaser's
"say-so," and cast similar doubt on using statistical
methods, retailer records and social media to cross-check
individual affidavits to screen out fraudulent claims. Such
methods, the Court reasoned, did nothing to advance the inquiry
regarding whether a specific individual purchased the product in
question. Class certification was accordingly denied, without
prejudice to the plaintiff's ability to renew their
certification motion at a later date. The Court will hear arguments
in respect of a renewed motion for certification later this
The Canadian Approach: Sworn Affidavits are Enough
Unlike our neighbours to the South, courts in Canada are more
likely to accept affidavit evidence attesting to proof of purchase.
In fact, receipts are typically not required. In one case, the
Court commented that the "threshold for making claims is very
low, reflecting the realities of consumer conduct, for example, in
not retaining receipts or having destroyed [products] that were
Instead of refusing to certify a class action because receipts
aren't available, courts in Canada not only certify the action,
but are increasingly approving "two-tier" payment
structures, in which purchasers who did not retain receipts are
entitled to claim less than purchasers who provide receipts or
other objective evidence of purchase.
In May 2013, a plaintiff who had commenced a class action
against Danone Inc. obtained approval of a settlement in
Québec for approximately $1.7 million. The Court approved a
settlement structure that provided damages to class members who did
not retain receipts as follows:
if claimants did not have receipts, then they signed a
sworn declaration in support of their purchase, and were
automatically entitled to $30; or
if the claimants had proof of purchase, they were entitled to
the greater of $30 or the value of their purchase, up to a maximum
In many cases, class actions are the only economical way for
people buying consumables such as margarita mix to pursue product
liability claims. The two-tier approach in the Danone case strikes
the balance in favour of access to justice by creating a two-tier
settlement structure that includes claimants who do not have
receipts. The stricter U.S. approach in Skinnygirl strikes the
balance in favour of preventing fraudulent or mistaken claims based
on our inherently flawed memories.
These differing approaches make clear that the threshold level
for proof of purchase varies between jurisdictions. When parties
want to settle cases brought in more than one jurisdiction, the
settling parties are well advised to do their due diligence on how
the different courts will react to the proof of purchase
requirements in their settlements.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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