Every now and then comes a glaring reminder that all promotions must be thoroughly vetted, their terms and conditions reviewed in detail, and any agencies and employees that are involved in carrying out and fulfilling the promotion trained and educated on how to do so.
It was recently reported that Caesars Entertainment is still fighting a class action lawsuit over what was likely considered a small, relatively inconsequential "birthday cash" promotion. The birthday cash promotion was run in 2003 – yes, 2003 – and over the years, Caesars had a multi-million dollar judgment entered against it, which it is litigating to this day.
The promotion offered consumers a $15 voucher on their birthday. On Saturday night, August 9, 2003, Debra Smerling went to Harrah's Resort Atlantic City with one of the $15 birthday vouchers, offered as part of the casino's loyalty rewards program. The voucher was good on Sunday, August 10.
Late Saturday night – specifically at 12:30 a.m., which is of course, Sunday, August 10 – Ms. Smerling tried to redeem the voucher. The casino refused, saying that the voucher was not valid until 8:00 a.m. on Sunday. Ms. Smerling left the casino and promptly filed the class action lawsuit.
The terms and conditions for the voucher did say that the voucher had to be presented at the casino's rewards center, the hours of operation of which indicated that it was open Saturday night (and through Sunday morning) until 2:00 a.m.
In 2010, a trial level court entered judgment in favor of the class action plaintiffs in the amount of $5.2 million, with each plaintiff slated to receive $100. The company filed a note in its SEC filings recently that indicated that further legal proceedings may wind up vacating the judgment.
Nevertheless, the point taken supports the old maxim not to be "penny wise, pound foolish." Companies that run any kind of promotion need to take care to ensure that all interactions with the public run smoothly. Consumers do not take kindly to companies who appear to try to "put one over" on them. Regulators – and class action lawyers – lurk right around the corner, looking for deep-pocketed, well-known defendants. Ten years is a long time to be litigating over a $15 promotional voucher.
Do you know what you will be doing in ten years? Don't let it be litigating over a failed promotion.
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