Plenty of Kohl’s customers have been frustrated at the store’s pricing and promotional policies, particularly when using Kohl’s Cash. Several have even sued the retailer for not making its policies more clear.

And, at worst, Kohl’s has been ordered to better disclose its policies – and then it continues to apply coupons and discounts however it wants to.

But not if two California shoppers have their way. Crystal Waters and Tony Valenti of Valencia, California are suing Kohl’s not because it hasn’t adequately explained its policies, but because they want Kohl’s to change those policies once and for all.

Their lawsuit, which has bounced around between state and federal court since it was first filed in February, has now been kicked back to a state court. So now it will be up to a California Superior Court judge to determine whether Kohl’s is cheating its customers.

At issue is the way Kohl’s accepts and applies Kohl’s Cash. During certain promotional periods, for every $50 that customers spend at Kohl’s, they earn $10 in Kohl’s Cash that can be used on a future purchase.

In the fine print, Kohl’s officially describes Kohl’s Cash as a “coupon”. But by naming it “Kohl’s Cash” instead of branding it as a “Kohl’s coupon”, the lawsuit claims that Kohl’s “infers, implies, and/or represents that Kohl’s Cash can be used as actual ‘cash’.”

But it can’t really. Kohl’s policies state that Kohl’s Cash must be used before any percent-off discounts are applied. So instead of getting your discount and then using your Kohl’s Cash as cash, you’re forced to use your Kohl’s Cash on the full price of an item, and then you get a discount on whatever balance remains. “If Kohl’s Cash could truly be used as actual cash, Defendants would apply the Kohl’s Cash after applying the discount,” the lawsuit states.

Shoppers are further disadvantaged when returning items which earned them Kohl’s Cash, the plaintiffs allege. When such an item is returned, Kohl’s deducts the full amount of the Kohl’s Cash from the refund. “While Defendants do not treat Kohl’s Cash as actual cash when applying Kohl’s Cash to customer purchases, they do treat it as actual cash when applying Kohl’s Cash to customer returns because it is in their interests to do so,” the lawsuit claims.

To better explain it in terms of actual dollar figures, the plaintiffs describe a hypothetical shopping trip.

“Let’s say a $100 toaster, which the customer purchased using $60 in Kohl’s Cash, was on sale for 20% off. If Defendants treated Kohl’s Cash as actual cash, Defendants would first apply the 20% discount to the $100, and then deduct the $60 in Kohl’s Cash, leaving the customer with an out-of-pocket expense of $20. However, Defendants first deduct the $60 in Kohl’s Cash from the $100 toaster, and then apply the 20% discount to the remaining $40, leaving the customer with an out-of-pocket expense of $32. Instead of paying $20 for the toaster, the customer has paid $32. The customer has lost $12.”

Following it so far? Now let’s say the hypothetical customer earned the Kohl’s Cash that was used to purchase the toaster, by buying a $300 blender. What happens if they want to return the blender? “Even though the customer receives the benefit of only $48 in Kohl’s Cash from the $60 certificate, when he or she subsequently returns the $300 blender, Kohl’s will deduct the full $60 from the $300 purchase price, and refund him only $240. The customer has now paid $92 for a toaster that would have cost him or her no more than $80 if he or she had never used Kohl’s Cash.”

It’s enough to make your head spin – and wonder whether all of these coupons, percent-off discounts and Kohl’s Cash are even worth it.

Waters and Valenti call it “a massive fraud”. Kohl’s, they say, has “created a scheme whereby they make it appear that Kohl’s Cash and percent-off discounts have greater value than they actually do. This, in turn, provides a false and misleading incentive for customers to return to Kohl’s to use their Kohl’s Cash and to purchase items at a percent-off discount.”

A previous legal challenge in California was resolved two years ago, when Kohl’s agreed to clear up confusion about its Kohl’s Cash policies by more clearly spelling out the program’s terms and conditions in stores and online. But nowhere was it said that Kohl’s couldn’t continue running the program however it wanted.

A separate, similar lawsuit in Ohio has been dragging on for four years now with no resolution just yet. In that case, a Kohl’s shopper also complained that she was unaware of how Kohl’s applied Kohl’s Cash and other discounts, because she said Kohl’s did not adequately disclose its policies. But she stopped short of demanding that Kohl’s change the program.

Waters and Valenti’s lawsuit, however, demands just that. They say the Kohl’s Cash policies violate a number of California consumer protection laws. So they’re asking the court to rule on whether the policies are “deceptive, unlawful, and/or unfair” and whether Kohl’s is being “unjustly enriched” by the manner in which it applies its discounts. They’re also seeking class action status, on behalf of anyone else like them who they say are being denied the full value of the discounts promised to them.

It will now be up to a California judge to decide whether Kohl’s can choose to run its own promotions however it would like. And if Kohl’s prevails, customers who don’t like it may choose to shop somewhere else.

Photo by JeepersMedia

21 Comments

  1. Just someone says:

    If you don’t want to lose kohl’s cash you ask for a merchandise credit. (a gift card). then you get the full price, including the kohl’s cash back. use that card when you pay for your stuff. I’m surprised no one mentioned that in the article NOR anyone in the comments. If no one is being told that then THAT is deceptive.

    • Hm interesting because if I process a return you can have 3 choices. Refund to your card, convert entire return amount into merchandise credit or issue a Corp refund. You spend rewards or kohls cash than you get it back if you return something that it had been applied too. Simple as that lol

    • I can’t tell you how many times I didn’t get to use my Kohl’s cash because of the expiration date I’ve lost tons of some money I didn’t even know this is an option im pissed

      • You should be aware you have at least 5 days max from last I heard after the initial expiration date so if you haven’t tried using your kohls cash after that date that’s not kohls fault. However ask a cashier to scan your kohls cash anyways a few days after if you forgot to use it and it should work. The worst that can happen is that it doesn’t work. I tell customers 3 days max after kohls cash final redemption day so they get their discount.

  2. Susie Chojnowski says:

    Very unfair that’s why I have stopped shopping there

  3. I’ve always felt they cheated us . Kmart is bad about returns and not giving u hardly anything for the returns regardless of what u paid

  4. I agree with all above except on the returns. You will loose the discount t and kohls cash. Also when exchanging you have to exchange fire exact item, color, and price to not loose any of it, and that’s with a receipt! Why can’t an exchange be similar or some other item and not the exact same
    Price? I know why, that’s how they have been pocketing the extra money by deceiving consumers. Have you ever done the math in an exchange or return? One penny off and your discounts will be recalculated for lesser amount
    In the exchange or return, meaning you then pay our more money on an exchange than a 1 cent difference.

    • Incorrect Shelly I work at kohls if you can’t find the item specifically you can even exchange for a item that is the same original price as the original one you had. Also without a receipt you can still do an even exchange as well for returns we can do lookups with the card your used be it credit or debit. Whatever you get back is what you said after the discounts. Than if you redeemed kohls cash or yes 2 you rewards you get that back as well mam. Whatever you paid and whatever you used is issued back at the time of return.

      • Paid*

      • This is not entirely accurate. This past Christmas a number of Kohl’s cash numbers were fraudulently applied to third party purchases, my local store had seen a number of such transactions. As a “good will” gesture the store manager allowed a dollar off coupon identical to the Kohl’s cash amount for those that could be verified as misused. Now try do a return and point blank you
        are told you lose the value of the cash you earned despite having been victimized somewhere along the way. Kohl’s is a smarmy place to shop. I stopped shopping there for years due to all the problems, my mistake to ever spend another dime in that place.

        • Lol okay tell a worker who has worked in customer service the policy he is taught is not entirely accurate.

  5. Ellen Sills says:

    I have also been unhappy with the way Kohl’s cash is deducted especially if you return an item.

    • Because you would like to commit return fraud by repeatedly buying and returning items, driving up the cost for everyone else?
      NO company allows you to buy and return items and keep the bonuses you you earned from the items that you returned. Try telling your credit card company that you should be allowed to keep miles you earned from items that you bought and then returned and see what they say.
      It’s not unfair, it’s common sense, and the rules are all printed on your receipt and the coupon. If you are too lazy to read then, that your family fault.
      Lots of people use and enjoy these coupons. Sucks that lazy people who don’t bother to read or understand very simple common sense rules are trying to rain on everyone else parade.

  6. I have been questioning this for awhile now myself. Just today I returned a pair of shoes that I paid 80 dollars for. Upon returning they refunded my card for 45 saying that I used 20 in kohls cash which I fail to remember doing. The math makes no sense either way. I will support any action against the company and really am turning my card back in.

    • Sir I can only assume you think kohls has the ability to change the amount you get back? Which is inncorect your receipt would state anything taken off be it kohls cash,rewards, or a $ Or % off coupon. If you did a lookup than it found your transaction through kohls to your financial institution in which th3 card belongs too. Meaning kohls have no control over reducing your amount because it was traced back to the original purchase.

  7. Sandra winston says:

    I agree with the two above. It just has you running back and forth to spend more money. It’s really not treated as kohl’s cash and am a regular customer who just recently figured this all out also. I would get so frustrated at the register when I see how it’s deducted. It’s like your giving it right back once you earn the cash . Meaning if there is a percentage used more comes off of the kohl’s cash which leaves you more out of pocket. I hope am saying it right it’s so confusing it gives me a headache. The other day I had 20 in kohl’s but a 20 percent . Total came to 17 bucks and change but in case I lost it I went ahead and added pair 3 $ earrings. I still ended up paying 3 $and change. If they are not going to deduct properly way give it. Oh I get it ,to keep us coming back thinking we are really getting a deal.

    • I’m sorry your head is so fragile aches from just trying to comprehend simple rules which are printed right there on the coupon and receipt.
      The rules are quite simple: dollar off coupon are applied first, then percentages off it says that on literally every coupon. It’s sad people who are too lazy to read the back of the coupon think that’s an excuse to sue. Kohl’s coupon policies are super generous, because most stores do NOT let you double up coupons at all. Heck, many stores don’t allow you to use coupons on sale items or clearance items at all.

      PS, your math is crap or you are lying. If you truly had $20 in purchases ($17 +$3 earrings) your total WOULD be 0. The percentage off is applied after the dollar off coupon, so presumably you assumed $17 AFTER the 20% off +$3 AFTER the 20% off.
      It says on the coupon that it doesn’t work that way, yet you are blaming a store because you are either too lazy to read the coupon or too stupid to understand a simple statement like “dollar off coupons are applied before percent off coupons”.
      It’s sad. Lots of us love these coupons and have zero issues with understanding how they work, but a couple lawsuit happy complainers who can’t be bothered understanding simple rules have to try to run it for everyone else.

      • Wow, not sure why you’re being so nasty to people. And I think that you are mistaken on the point of the case as well. The point of this case (whether I agree with it or not is irrelevant) is that the ‘coupon’ is called Kohl’s Cash, (cash being the operative word) and that Kohl’s gives less value to the coupon when being applied to a purchase vs. a return.

        When you hear the term ‘Kohl’s Cash’ (according to the lawsuit) the average person would think of something that can be spent like cash (i.e. used at the end of the transaction after coupons and on anything you want). The customer is instead being given a coupon (which can only be utilized on specific items and in specific ways and is used before other discounts, etc.)

        The court case is determining not whether people can understand the rules of the coupon or even how simple the coupon instructions are, but whether Kohl’s has created a type of false advertising in calling the coupon ‘Cash’ and whether or not Kohl’s is profiting by customer use of the coupon in a manner such as the transaction described in the court case, which gives the coupon differing values based on which stage the customer is in for purchase vs. return.

      • The whole problem is the wording KOHLS CASH! The lay person is assuming it’s just that “cash”. You should not expect me to give you my “cash” before you take off my %off. That’s the issue. SMH

  8. Well I’ve found that your statement on kohls deducting the kohls cash upon a return is barely correct. If a customer redeemed their kohls cash then it’s deducted from the return amount. However if they don’t if they drop below one of the benchmarks whatever it may be $5 kohls cash for every $25 Or $10 kohls cash for every $50. For example, if a customer spent roughly 100 after tax then they earn $20 kohls cash now if they return it ,and drop below the $50 benchmark than they lose $10 of the $20. However if they even exchange the items for something of the same original price then their kohls cash isn’t affected. Just my two cents

Leave a Reply

Your email address will not be published. Required fields are marked *

*

Privacy Policy
Disclosure Policy