National Gold Retailer Agrees To Honor Past Promises

Attorney General Spitzer today announced a settlement with the nation's largest kiosk retailer of gold jewelry to reinstitute its lifetime guarantee program for past customers.

Piercing Pagoda, a division of Zale Delaware, Inc., promised to allow customers who had bought jewelry under its "Lifetime Warranty" program to get free repairs and replacements for defective jewelry and its replacements.

Piercing Pagoda also agreed to redeem receipts of consumers who participated in the original version of the "Jewelry Club offer" that provided an unlimited time in which to purchase five pieces of jewelry in order to receive a free sixth piece.

"This settlement sends a strong message that my office will hold retailers to their promises to customers," Spitzer said.

In 1999, the high-volume retailer of inexpensive gold jewelry drastically limited its three-decade old policies regarding defective merchandise and free offers. For years, Piercing Pagoda provided a lifetime guarantee for the replacement or repair of defective jewelry. In November 1999, however, the jewelry retailer changed its policy and limited the warranty period to 90 days. Piercing Pagoda kiosks then refused to continue the lifetime warranty after faulty jewelry had been replaced.

Through its "Jewelry Club," Piercing Pagoda also provided repeat customers free jewelry after five purchases. Customers later discovered that Piercing Pagoda refused to honor its "no expiration date" policy and instead gave $10 gift certificates for each $100 spent which expired in 90 days.

Under the settlement, Piercing Pagoda paid $10,000 in costs to the state. The settlement also requires Piercing Pagoda to post signs at its stores and kiosks clearly disclosing the terms of the agreement with the Attorney General's office.

Consumers who turned in their original receipt to Piercing Pagoda after November 1, 1999 must go to a Piercing Pagoda kiosk before December 31, 2001 to receive a new receipt entitling them to continued free replacements of defective jewelry.

The Pennsylvania-based company has over 900 stores in the United States and Puerto Rico with as many as 34 kiosks in New York State. It offers low-cost gold jewelry, generally 10 Karat rings, earrings, and bracelets.

This case was handled by Associate Attorney General Robert Vawter of the Consumer Frauds and Protection Bureau.


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