Adray’s Settles Lawsuit Over Newspaper Ads

A discount electronics chain with seven stores in Ventura and Los Angeles counties settled a government lawsuit Wednesday accusing it of falsely promising free airline tickets to customers and advertising “private sales” that in fact were open to the public.

The parent company for Adray’s Discount Department Stores agreed to pay $20,000 in civil penalties and investigative costs, plus give more than 3,400 eligible customers their choice of one of 10 items of free merchandise.

The lawsuit, filed and settled the same day in Ventura County Superior Court, contains no admission of wrongdoing by Adry-Mart Inc., a Van Nuys-based corporation.

Adray’s, which started as one store in Los Angeles in the 1960s and has grown to seven stores, does “well in excess” of $100 million in sales a year, its attorney, Aton Arbisser, said.

The suit accused Adray’s of false advertising and unlawful business practices arising from October, 1992, newspaper advertisements promising “free round-trip air fare for two” to Hawaii, Florida or the Bahamas to customers who purchased more than $200 worth of merchandise.

What customers actually received, government attorneys said, were travel certificates from Vacation Ventures, a Florida corporation that sells promotional travel packages to retailers.

Adray’s advertisements did not say customers could not get the airline tickets unless they paid more than $1,500 to the travel company for hotel accommodations and inter-island travel, attorneys said.

“If it (had been) fairly represented, no one would come in to buy anything,” said Deputy Atty. Gen. Jerry Smilowitz, whose office filed the lawsuit with the Ventura County district attorney’s office.

“We believe Adray’s acted in good faith, foolishly maybe, but in good faith,” Smilowitz said. “It’s a good store.”

Deputy Dist. Atty. David Fairweather said Adray’s, which has a store in Ventura, cooperated with the investigation and immediately stopped its travel promotion when it was notified of the problems.

“Adray’s was not experienced in the travel promotion game and they weren’t familiar with all the laws governing these types of things,” Fairweather said. “They acted more out of ignorance than malice.”

Fairweather said he initiated the investigation last fall after his mother, acting in response to a newspaper advertisement about the airline tickets, purchased a piano-style electronic keyboard at a Los Angeles Adray’s and was given the travel certificates.

“She just asked me if it was on the up and up,” Fairweather said. “It wasn’t like she was really victimized. She knew that it was something too good to be true.”

The attorney general’s office got involved because it specializes in litigation involving travel promotions, Smilowitz said. Such promotions are a major problem in California, he said, although Adray’s is the only retailer in the state that he knows of who entered into an agreement with Vacation Ventures.

Arbisser said the discount chain heard about Vacation Ventures at a meeting of a national buying group to which it belongs. Other stores in the group said they had had no problems while using the travel promotion, so Adray’s decided to sign up, Arbisser said.

Fairweather said his office knows of 3,424 people who bought more than $200 worth of merchandise at the various Adray’s stores while the travel promotion was in effect. Those people will be notified by mail that they can be compensated by selecting one of 10 items of merchandise, including dinnerware, a cassette player or a combination radio and coffee maker. The items have a suggested retail price of up to $30, Arbisser said.

Besides the travel promotion, the lawsuit accuses Adray’s of false advertising for using direct-mail invitations to “private sales” that in fact were open to the public.

Fairweather said his office sent a warning to Adray’s about the invitations in August. Although the wording of the letter changed slightly for the October sale, the letter still implied that a customer had to have an invitation to get into the store, Fairweather said.

Arbisser said customers were told in the letter to keep the invitation so they would remember the sale. Customers knew they did not need the letter to get into the store, he said.

“The target audience for the letter understood what was going on,” Arbisser said.