Fashion retailer H&M will pay $36 million to settle claims it illegally pocketed millions of dollars in unused gift card balances, New York Attorney General Letitia James said Thursday.
Since at least 2008, the Swedish company has unlawfully held more than $18 million in unused gift card balances in H&M’s bank accounts, rather than sending it to the state’s Abandoned Property Fund, according to James. H&M then repeatedly misled authorities about the missing money by blaming an Ohio company that oversaw its gift card business, she added.
“My office has zero tolerance for companies that disregard the law and line their pockets with money that belongs to hardworking people,” James said in a statement. “Violating the law is not trendy or tolerable.”
H&M will pay $28.26 million to New York and $7.74 million to a whistleblower, William French, according to a legal filing. French sued the retailer in 2016, accusing H&M of violating New York’s False Claims Act and a law on abandoned property.
H&M did not admit or deny wrongdoing in the settlement. The company did not immediately respond to a request for comment.
Based in Stockholm, H&M operates about 4,800 stores around the globe and generated $20.1 billion in revenue last year, according to its website.
Consumers with unused balances in gift cards issued by H&M between 2004 and 2014 can use the card or file a claim here.
As much as 3% of gift card dollars are never redeemed, and about $3 billion in gift cards went unspent in 2020, according to one estimate.
Gift cards are also a vehicle for scammers: Any entity that demands to be paid “by putting money on a gift card” is up to something underhanded, according to the Federal Trade Commission.
