6-Sep-13 – As a class action lawsuit looms for Restaurant.com, the online seller of restaurant coupons – that is owned by two River North residents – is serving as an example of what not to do for any business offering gift cards and certificates.

On July 9, the Supreme Court of New Jersey decided against the Arlington Heights, Illinois company in a complaint over expiration dates on gift certificates the company sold that have conflicted with state laws, including laws in New Jersey and Illinois, which define how long a gift certificate must be valid.

The decision clears the way for a class action lawsuit to resume against Restaurant.com, owned by Dr. Kenneth Chessick and his wife, Ellen Chessick (right), who is president of the condo board at Marina City. The case could affect thousands of consumers who purchased gift certificates from RDC between 2006 and 2010.

Although they currently do not expire at all, for four years starting on April 4, 2006, Restaurant.com coupons expired one year from the date they were issued, according to the fine print, “except in California and where otherwise provided by law.”

A lawyer in Cincinnati who is also a columnist says the case should be a caution for any business offering coupons online. Writing in his Strictly Legal column for a Gannett-owned news site, Jack Greiner says fine print such as “void where prohibited“ is not good enough.

“Sellers have to be more specific and tell consumers if a particular provision is void in the Garden State,” says Greiner (left), referring to New Jersey. “Suffice it to say, Restaurant.com didn’t make the necessary disclosure.”

Reacting to its state’s Supreme Court ruling, an insurance agency in New Jersey is advising its business customers not to put an expiration date on gift cards and certificates. In a recent news release, Clarke Insurance Agency offered tips to minimize the risk of a lawsuit.

“Understand that a gift card transaction online must include all the features of a contract, such as an offer, acceptance, consideration, and performance by both parties.”

Complaints to Illinois AG are from restaurants, not customers

Meanwhile, the Illinois Attorney General’s office says it has received 19 complaints about Restaurant.com since 2004. While this is a fraction of the 560 complaints filed against RDC with the Better Business Bureau in the past three years, what makes the complaints with the Attorney General unique is that most of them are not from consumers buying coupons but from businesses that signed up to allow RDC to offer coupons to their restaurants.

The most recent complaint, filed on April 19, 2013 by the owner of a small seasonal restaurant in Sycamore, Illinois, west of Chicago, claims RDC “aggressively” called him to advertise on its website. While he said he was interested, he also said he would have to wait until after tax season.

“The next thing I know,” writes the owner, “three customers are at my store with coupons they purchased on the Restaurant.com website.” He emailed, then called the company and was told they could not cancel the service without first checking with their sales staff. His restaurant, says the owner, “is just a small business in the county and I cannot afford this, nor do I have the time for this ridiculous behavior.”

Another Restaurant.com advertiser says he tried to get RDC to stop listing his restaurant but was told he would first have to participate in an “exit interview.” For four weeks, the owner said he tried to arrange such an interview but RDC would not return calls and emails.

Still another restaurant owner says he agreed to participate but told Restaurant.com he would be closed for about seven months. Shortly after speaking with an agent, the owner says RDC started issuing coupons to his closed restaurant.

“Repeated complaints to this unscrupulous outfit forced me to engage [an] attorney,” the owner wrote in his complaint.

Ellen Chessick has not responded to requests for comment.