Taco Bell Fined Over $85k For Allegedly Breaking Gift Card Laws In California

On the Taco Bell "Cravings" value menu, $6 means six Cheesy Roll-Ups. Or, for just $5, foodies can fill up on a "classic combo" meal with a burrito, a taco, chips, and a drink. That's kind of a big deal — especially at lunchtime, which happens to be right now, and your stomach is growling. Luckily, you reach into your wallet, and there's a Taco Bell gift card with $8 left on it. What luck! That's enough for a full meal plus a tip ... right? For foodies in California, the answer is a great big "wrong." That is, until recently.

The fast food chain is facing major backlash and legal action after refusing to cash out customers' gift cards if the balance was under $10. Foodies have been forced to discard their unusable funds — but now, it looks like it's Taco Bell's turn to pay. On June 15, Los Angeles District Attorney George Gascón issued a fine of $85,500. Itemized, that's $45,000 in penalties and $30,500 in investigative expenses (or 9,5000 unredeemed $9 gift cards). California state law dictates that if a customer's gift card balance is under $10, they are legally allowed to redeem it for cash instead of using up the remaining balance. But, Taco Bell hasn't been playing by the rules — a charming attribute when you want to "Live Más" like the chain's slogan encourages, but less endearing when it means customers aren't getting their money's worth.

As part of the settlement, Taco Bell is admitting no wrongdoing. But, the chain will be required to post a sign near each register in every store informing customers of the cash redemption policy for restaurant gift cards under $10. As a final safehold (and a slap on the wrist), the Los Angeles County District Attorney's Office is also requiring all future Taco Bell gift cards to be printed with a link to the redemption website for more info. Moreover, $10,000 of the fine is being allocated to the California Consumer Protection Prosecution Trust Fund to help protect foodies from issues like this one.

The Taco Bell website offers both physical and E-gift card options that can be redeemed via smartphone. Now, the website also features a button for customers to submit a request for cash back following the completion of a service form.

This recent fine arguably shines a less flattering light on the playful "for the people" messaging the fast food chain has been conveying lately. T-Bell launched a petition to the U.S. Patent and Trademark Office to reclaim "Taco Tuesday" as a public domain phrase, prying it from the trademark grasp of small-chain Taco John's. It even partnered with LeBron James for an ad campaign in support of the effort. But, if the Los Angeles Lakers star had wanted to cash out a Taco Bell gift card worth less than $10 for Taco Tuesday, he might have gotten blocked.