Reference no: EM133264966

Assignment:

A local department store, Costmore Ltd., decided to institute a rewards program for its customers. The program encouraged customers to shop by accumulating 'Costmore Dollars', with every purchase. The customers could then redeem their 'Dollars' towards the purchase of certain merchandise. Each receipt specified the 'Costmore Dollars' value and customers were directed to bring their receipts to the store and 'spend them like money'.

Each week, the store manager would identify which products were eligible for purchase with 'Costmore Dollars' and the manager would generally identify slower moving products. Costmore's marketing department ran a TV ad that showed a family enjoying a backyard barbecue. The ad showed some people enjoying a large hot tub, other people sitting on some patio furniture, and a couple people standing near a bar-b-q grilling some hamburgers. People were scattered throughout the ad eating and drinking; generally enjoying themselves. The caption under the ad said "Make your dreams come true with Costmore Dollars".

Melanie was thinking about buying a $3,000 bar-b-q at another store when she saw the TV ad. She immediately began saving her receipts and accumulating 'Costmore Dollars'. She was soon buying all of her groceries and all of her family's household supplies at Costmore. She also convinced other family members to shop at Costmore to help her accumulate more 'Dollars'. Together they accumulated $3,000 in 'Costmore Dollars' over the course of a few weeks and Melanie went into the store to 'buy' her bar-b-q. She couldn't find the bar-b-q in the TV ad and went to speak with a customer service representative to ask where the item was. The clerk told her that the store didn't carry the bar-b-q and that the 'Costmore Dollars' could only be used for certain items (not including the bar-b-q).

Can Melanie sue for breach of contract? Give reasons for your opinion. What might Costmore have done differently to protect itself from this legal risk?