January 8, 2018 9:00 pm
Updated: January 8, 2018 9:12 pm

Should you sign up for Loblaw’s $25 gift card?

WATCH: Registration is now open for people to sign up for Loblaws' promised $25 gift card. The Canadian grocery giant is calling it a goodwill gesture for its part in a bread price-fixing scheme. But as Sarah Offin reports, lawyers say you should think twice before cashing in.


Registration opened Monday for people wanting to sign up for Loblaw’s promised $25 gift card, but lawyers are warning consumers to “read the fine print.”

Loblaw Companies Ltd. is offering customers the card as a goodwill gesture after admitting the company participated in an industry-wide bread price-fixing arrangement.

The grocery giant expects between three and five million Canadians will take them up on their offer.

WATCH: $25 Loblaw’s gift card begins Monday

But some lawyers suggest it’s nowhere near appropriate compensation and are warning consumers to read the fine print.

“It’s an incentive plan,” Michael Vathilakis with Renno Vathilakis Inc. said. His firm is one of two Montreal-based law firms involved in a class-action lawsuit over the scandal.

“It’s, ‘Welcome, come on into the store, spend $25 dollars.’ You’re likely going to spend more than $25 if you go into a Loblaw’s store.”

WATCH: Canadians can now apply to receive a $25 Loblaw gift card as compensation for a price-fixing scheme on packaged bread. But food policy experts say there’s more than meets the eye.

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Kevin Groh, vice-president of corporate affairs and communication with Loblaw, addressed the concern in a statement.

“We have been consistent that accepting a $25 Loblaw card would not restrict customers from receiving incremental compensation through a class-action settlement,” he said. “We have also said there would be an offset against civil liability. That means, in effect, we would not have to pay customers the same amount twice. The $25 Loblaw card would represent an advance payment against any settlement that a court may require. It would be deducted – to the extent of $25 – from that settlement.”

“What they’re saying is they’re going to take that $25 and remove it from any compensation a member would receive as part of a class-action lawsuit,” Vathilakis said.

While some shoppers say they want both, a growing social media campaign encourages customers to donate their gift cards to local food banks.

In Calgary, food bank officials say they’ll use their retail buying power to make each $25 donation go further.

“The great thing about getting these gift cards is that we can purchase the items that we desperately need in our hampers, especially at times when donations are down,” Shawna Ogston with the Calgary Food Bank said.

The gift cards don’t have expiry dates, which means food banks can also put the money to use when it’s needed most.

Registration for the card is open until May 8. The offer is expected to cost the company between $75  million and $150 million.

© 2018 Global News, a division of Corus Entertainment Inc.

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