Settlement Forces Ralphs to Make Good on Free Hotel Stay for Thousands

Ralphs Grocery Co. agreed Wednesday to offer free two-night hotel stays to thousands of customers who qualified for a 2003 sales promotion but weren’t told of restrictions on the prizes.

The supermarket chain reached a settlement with the state attorney general’s office to resolve allegations that it engaged in deceptive advertising and unfair business practices in its “Great Escape” promotion. The settlement was approved Wednesday by San Diego County Superior Court Judge John Einhorn.

The spring 2003 promotion promised two free nights in a hotel to Ralphs’ Club Card customers who bought $400 in qualifying goods between June 4 and July 15, 2003.

Ralphs canceled the promotion after being flooded with 50,000 applications for reservations.

Several customers sued on behalf of those applicants and about 250,000 others who qualified for the hotel stays but didn’t apply, possibly because they found the process so unwieldy and restrictive, according to one attorney involved in the case.

Advertising for the promotion had failed to disclose restrictions on travel dates and reservation deadlines. Some customers also were not told they would have to pay taxes on the prize, that the awards were subject to availability, and that certain dates would be blacked out.

Customers who complained that they did not receive the promised travel were offered $50 or $100 coupons toward a hotel stay.

Wednesday’s judgment will apply to customers regardless of whether they accepted the coupons, according to a statement from Atty. Gen. Bill Lockyer.

Restitution ordered by the court will give qualifying customers two-night stays at any Marriott-owned or operated hotel.

Additionally, Ralphs must pay $125,000 in civil penalties and $100,000 to reimburse the attorney general’s office for its investigative costs.

The court also will require Ralphs to change future travel promotions, including disclosing all restrictions in a “clear and conspicuous manner.”

Ralphs maintained that a vendor it hired to administer the promotion awards failed to do its job.

“Unfortunately, Ralphs’ vendor was responsible for administering and fulfilling ... customers’ requests to redeem their certificates for hotel reservations [and] did not meet its obligations to Ralphs and its loyal customers,” the company said Wednesday night.

Lockyer said the judgment “will provide thousands of ‘Great Escape’ victims what they bargained for and were denied: a free stay in a nice hotel.”