Latest News

Attention Save Mart Shoppers: It's easy cash, but consider real cost

Save Mart store file photo. (Ted Benson/The Modesto Bee)
Save Mart store file photo. (Ted Benson/The Modesto Bee)

If you haven't been to Save Mart recently, you probably aren't aware that something extra is appearing in customers' shopping bags.

No, it isn't bonus shopping coupons or fliers calling attention to special sales. These days, Save Mart shoppers are leaving the company's stores with legal documents stuffed in with their groceries.

If you decide to fill out the forms and send them in, you could receive a Save Mart gift card worth as much as $20. It's the result of a "proposed settlement" of a class-action lawsuit brought against the Modesto-based grocery chain about five years ago by the Folsom law firm of Lindsay & Stonebarger.

The civil case, Deerinck et al. vs. Save Mart Supermarkets et al., maintains that the chain gave customers credit card transaction forms that included a line for a telephone number, a violation of California civil law enacted to curtail the risk of identity theft. The lawsuit claims as many as 300,000 customers of Save Mart, S-Mart or Food Maxx stores may have had their personal information compromised from July 21, 2003, to July 23, 2004.

Previously, attorneys for Save Mart acknowledged that there was a pre-printed space for a cardholder's phone number on some forms. However, they said, Save Mart was unaware this violated state law. All such forms were pulled from stores after the lawsuit was filed in 2004.

In the proposed settlement, Save Mart acknowledges the violation but denies any wrongdoing. It also stresses that no member of the class was injured or suffered damages. However, the proposal says that to "avoid the expense, inconvenience and risk" created by the lawsuit, Save Mart concluded it was in its best interest to settle the case.

Save Mart agreed to give each eligible customer a $20 gift card. The total amount of those gifts is not to exceed $3.5 million. There are other payout provisions based on factors such as the number of claims outlined in the settlement. Also, the three plaintiffs on whose behalf the case was filed will get $10,000 apiece.

A San Joaquin County Superior Court judge had determined the case could proceed and subsequently approved the settlement proposal. If there are no objections, the agreement could get final court approval June 24.

So, what do you have to do to get a gift card? Not much. Just fill out the form in your shopping bag or go to www.savemart.com/inc/viewfile.inc.php?id=127 to download one. All claim forms must be received by June 9.

These forms simply ask if you purchased merchandise from Save Mart from July 21, 2003, to July 23, 2004, using a credit card -- not a debit card or ATM card. You don't have to supply any receipts or proof that you bought something when the forms were in use.

It's that simple, really. But should it be? And does the punishment fit the claim?

Class-action attorneys will argue that the settlement is more than fair. They maintain that ID theft is rampant and Save Mart's use of these forms put its customers at risk, something that's prohibited by state law. As in all cases, ignorance of the law, any law, is no defense.

A class-action lawsuit might not seem like a big deal to some people, attorneys say, but it provides the public with an important level of protection and recourse. These cases also serve as a reminder to businesses that there are consequences if they use practices that can be called into question.

OK, I get that. But I suspect any company doing business in California these days is already aware of those risks. That's not to say the public doesn't need protecting. You don't have to look very far to see how people have been taken advantage of and victimized in recent years.

But in the case of Save Mart, both sides agree that no cases of identity theft occurred and no losses were sustained. Save Mart decided to cut its losses and settle rather than drag out the case any longer.

Kyla Christoffersen, a policy advocate for the California Chamber of Commerce, wrote in a recent analysis that the state is an attractive forum for class-action lawsuits because it is known for class-action standards more relaxed than those of federal courts and a number of other states.

"Faced with the overwhelming prospect of years of litigation involving numerous hours of work by attorneys and multiple experts, the costs of which cannot be recovered even if the defendant prevails, most defendants feel forced to settle," Christoffersen wrote.

I think that pretty well sums up what happened in this case.

Maybe Save Mart deserved some sort of rebuke for using those forms, but not to the tune of $3.5 million.

Perhaps the most troubling aspect of the settlement is that people don't even have to prove they shopped there during the time the forms were in use. That probably means a lot of folks who never shopped there will end up with gift cards.

For those of you who did, getting a gift card will bring you a few extra bucks, but probably disqualifies you from complaining about the legal system and the litigious nature of our society.

While applying for your piece of the settlement doesn't carry any out-of-pocket costs, remember that nothing's free. This kind of case drives up the cost of doing business in California, drives up the cost of the products you buy and drives away companies people work for.

That's a steep price for all of us to pay for the wrong line on some form.

Bee business editor David W. Hill can be reached at 578-2336 or dhill@modbee.com.

  Comments