California consumers are eligible for $15 in coupons and checks from Gamestop, which has agreed to settle claims regarding its marketing of used games that include downloadable content (DLC).
Under the settlement with the law firm of Baron & Budd, consumers who purchased certain used video games from Gamestop were forced to pay an additional $15 for the DLC content, even though that content was marketed as "free" on the box.
As part of the settlement, consumers who purchased qualifying used games and who are enrolled in GameStop's "PowerUp Rewards" customer loyalty program can receive a $10 check and a $5 coupon, Baron & Budd said. Consumers who purchased a qualifying game, but are not members of GameStop's loyalty program, can receive a $5 check and a $10 coupon.
A representative from Baron & Budd was not immediately available to comment on which games qualified for the refund.
Gamestop will also be forced to post signs on its shelves for the next two years in California stores, as well as online, notifying customers that they may have to pay extra for the DLC that's tied to used games.
"We are pleased that as a result of this lawsuit, we were able to obtain complete restitution for consumers, with actual money paid out to people who were harmed by GameStop's conduct," said Mark Pifko, Baron & Budd attorney and counsel in the lawsuit, in a statement. "The in-store and online warnings are an important benefit under the settlement as well, because if GameStop discloses the truth to consumers, it is unlikely that they will be able to continue selling used copies of certain games for only $5 less than the price of a new copy. In fact, we already know that not long after the lawsuit was filed, GameStop lowered prices for used copies of many of the game titles identified in the lawsuit."
Baron & Budd's suit contended that Gamestop makes more than $2 billion per year on used game sales, without paying any royalties to game makers. Consumers can trade a used game in for a fraction of the sales price, but Gamestop then marks up the game to just under the price of the new game, or about a $5 discount, Baron & Budd said.
To apply for the settlement, California consumers need to visit the settlement Facebook page to find out how to recover their funds. For those who don't live in California, Baron & Budd said they're willing to hear from consumers in other states to launch similar lawsuits.
Gamestop's PowerUp loyalty program is a sophisticated tool that tracks customer preferences, including what games they prefer and how often they buy new games or trade them in. That allows the company to spend less on general marketing, targeting specific customers instead. PowerUp members trade in games three times as much as nonmembers, pick up reservations 10 percent more, open email twice as often and are five times as profitable, according to Janney Capital Markets analyst Tony Wible, as quoted by Advertising Age.
Rumors that new game consoles from Microsoft and Sony could restrict the playing of used games could significantly hinder Gamestop's business model, the trade magazine noted.
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