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The Past, Present, And Future of GameStop's California Used Games Settlement

How one customer's purchase of Dragon Age: Origins forced GameStop's hand, and whether it means anything for used games going forward.

Unless an unexpected hiccup occurs, for the next two years, GameStop locations in California will have to better inform customers about downloadable content tied to new games when they purchase used, and, over the next several months, must pay $15 to anyone who bought a used game believing everything on the box was on the disc.

James Collins is the one who got the ball rolling on this.

It’s unlikely Collins is the only person who has dreamed of suing GameStop, but on March 23, 2010, Collins made the step that most people don’t: he lawyered up and filed a class action lawsuit against the Texas-based retailer.

“GameStop tricks consumers into paying more for a used game than they would if they purchased the same game and content new,” reads the original class action filing from late March.

Dragon Age: Origins is one of many games that now ship with content free only if the game's new.

Collins purchased a used copy of Dragon Age: Origins for $54.99, roughly $5 less than what it would have cost to purchase it brand-new, from a GameStop in Hayward, California on January 6. The game’s box promises free downloadable content for buying the game, when in reality, it’s only free if you’re purchasing a new copy with an unused redemption code found inside. Collins claimed to have no knowledge of this, and played the game until “on or around” January 19, when he returned to GameStop to complain about having to pay more money to access said additional content.

The DLC would cost Collins $15, meaning he only saved $5 from the used game purchase--a $10 loss. Since it was more then seven days, per GameStop policy, GameStop refused his return.

So he filed a lawsuit.

Matthew Proctor and Danoby Ortiz have a similar story. For Proctor, the game was The Saboteur. For Ortiz, it was Resident Evil 5: Gold Edition. Since the lawsuits were filed as class actions, meaning the outcome can benefit more than just the individuals who filed the claim, the lawsuits were combined.

The first details on the settlement were announced in a press release last week by law firm Baron & Budd.

GameStop has not responded to my requests for comment on the settlement.

What happened is a preliminary ruling by the courts on the settlement agreement. There will not be a trial, though a trial was the original goal of Collins’ lawsuit. There’s an unlikely chance the settlement dies, as there is a period between now and September 17 for objection from outside parties. Those parties do not include GameStop, who has already agreed to the terms of the settlement.

If you purchased a used game from GameStop between March 23, 2006 and April 9, 2012, you’re affected.

And because it’s a settlement, GameStop doesn’t have to admit it did anything wrong.

“Neither this Agreement, nor any exhibit or document referenced herein nor any act performed or document executed pursuant to this Settlement Agreement [...] shall be construed as, or deemed to be evidence of, an admission or concession by GameStop.”

What happens next? For starters, there’s a website: www.gamestopsettlement.com.

Since the preliminary approval, GameStop has handed over applicable customer information to the claims administrator handling the case. The aforementioned website will (soon) have claims forms, but if GameStop has your details, that's coming via mail or email. GameStop has information for customers who have used its PowerUp program, but if you aren’t part of that program, you can still get your money. That’s where it gets a little weird.

For example, the used games affected by the lawsuit will not be disclosed. Games affected, according to the law firm, include ones “that offered free downloadable content to consumers of a new copy that was not available without additional payment to people who purchased a used copy of the game.” If your game fits that, you're good.

Used games have and probably will remain a common scapegoat for the industry's problems.

The other strange thing? Consumers can, should they chose to then be legally liable, make claims on purchases that may or may not have happened. You only have to enter the game name, date of purchase, location of purchase and whether the extra content would have been available through Xbox Live or PlayStation Network.

“Option Two Claim: Settlement Class members may elect to receive a $5 payment and a $10 Store Credit. Settlement Class members who elect to make an Option Two Claim shall not be required to provide proof of purchase, nor shall it be required that GameStop verify their purchase through GameStop’s own records.”

To protect against fraud, the claim form underscores you’re making statements under penalty of perjury.

“With the understanding that many people do not save receipts from relatively small consumer purchases like video games, and that not everyone who may have purchased a qualifying used game is a member of GameStop’s PowerUp rewards program," the law firm told me in a statement, "the parties came up with Option 2 as a way for those people to be compensated.

That said, you can’t rack up hundreds of dollars in claims. Even if you bought dozens of used games, it only amounts to one payout.

Going option two entitles you to $5 in real-world money and $10 in GameStop credit towards used products. If you provide a PowerUp number, they can verify the purchase and offer $10 in real-world money and just $5 in GameStop credit. Again, it's only a single payout, and even in the event that consumers are actively defrauding GameStop, keep this in mind: most of the money being paid out will probably go right back to GameStop.

Claims must be postmarked by July 19, and the claim forms are below. Do not use these claim forms, as they are not final. The correct claim forms will eventually be available on the website.

In addition to the pseudo refunds, GameStop stores in California must also have “shelf takers” (you know, this stuff) near used games, warning consumers about possible additional purchases related to used games, counter mats that include similar warnings, and a disclaimer on GameStop’s official website. All of this will last for two years.

Having established a legal framework, the law firm is already seeking individuals with similar stories in states other than California, but lawyer Andrew Ehmke of Texas-based Haynes and Boone is hesitant to read too much into it.

“That seems unlikely,” Ehmke told me. “What might happen, though, is that GameStop might be sued in a handful of the larger states. On the flip side, GameStop could also be considering options to minimize the risk from these future lawsuits by preemptively providing a similar settlement offer to any of its customers, but that’s speculation on my part.”

One scenario could involve GameStop getting ahead of the problem, rather than untangling a series of legal battles.

“I would not be surprised to see GameStop adjust its marketing, advertising and pricing across the country for used games that contain the first-time buyer one-time use codes,” said Ehmke. “It may be too much of an administrative hassle to have different pricing and advertising in different states.”

Want to read more? Get your legal on.

Patrick Klepek on Google+
152 Comments
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Posted by CRAzYKiLL3R93

Even though we're going to have to start paying sales tax on Amazon purchases in September in California (a state law passed last year), I'll still buy my games on Amazon over Gamestop.

Posted by Jab1235

@sciential said:

@Jab1235 said:

It's just another example of someone lawyering up to reap the benefits of a trivial situation. Boo Hoo he spent $55 on a game and didn't get his code, why should we pay for the court costs of him arguing that he thinks he's entitled to downloadable content for a game. It's not something we should be bringing to courts, it's something we should have common sense about.

As much as I dislike Gamestop and most of their practices I hope they crush this guy.

He didn't fall and pretend to be hurt so he could take money from a bar or convenience store owner. He sued Gamestop over a practice that - even if it was manufactured in his case - surely rips off at least some of its customers who genuinely fail to realize that the used copy is missing content worth more than the savings over a new copy.

Gamestop could be forthright if they wanted to, but we all know that they make more money on used copies. A sticker that says "Does Not Include $10 Multi-Player Access" on used copies of Mass Effect 3 because Gamestop is afraid of another lawsuit is a good thing. You might already know better, but some mother buying a birthday present from a Gamestop clerk who is pushed to encourage her to buy the used copy might not.

I agree with you that something does need to change but is it really necessary to bring this up in high level courts? I'm also unclear on if the individual is going to make any money or get any special benefits off of this case? Really if the guy is only doing this to get gamestop to change their business practices then that's great but if he's doing this so he can make some easy money then it's stupid.