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Olive Garden settles class-action lawsuit; did it lose or win?

Written By Scott Joseph On July 14, 2009

The Orlando Sentinel reported this morning that Orlando-based Darden Restaurants has gotten final approval for a settlement agreement in a class-action lawsuit. The company will mail out vouchers for a “free” appetizer to more than 12,600 people who responded to the class-action lawsuit. The 2007 legal dispute had nothing to do with breadsticks or unlimited salad — a customer had complained that Olive Garden was printing the last six digits of customers’ credit card numbers on the receipt instead of the legal limit of five. It probably seems minor, but that extra digit puts identity thieves and credit scammers one number closer to stealing the full sequence.

So to make amends, Olive Garden offered the vouchers, which have a face value of $9. Is it possible the restaurant chain will come out ahead in all of this?

First of all, the vouchers are worth $9 but the cost of the food, of course, is less. And vouchers, like coupons, have a way of going unused beyond the expiration date, which in this case is 120 days from issue. Then, how many of those receiving the vouchers will have only the free appetizer? It’s much more likely that recipients will have a full meal, paying for the other courses at full price. Average check size per person has been reported at $15. If you figure $21 for a party of two ($30 average check minus the $9 voucher), the profits after food costs aren’t likely to cover the legal fees and ancillary costs of addressing the complaint. Still, it’s a lot closer to a win-win for both the complainants and the restaurant company.

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