What is coupon settlement?

A coupon settlement resolves a class action by giving class members discount vouchers or credits toward future purchases from the defendant, rather than cash. The Class Action Fairness Act specifically restricts how coupon settlements can be structured, generally tying attorneys' fees to the value of coupons actually redeemed rather than their face value, to discourage settlements that overstate their real worth to the class.

Coupon settlements are controversial because a coupon's redeemable value to a class member is often much lower than its stated dollar amount, especially if it requires an additional purchase from the same company the class sued or has a short expiration window. CAFA's redemption-based fee calculation was specifically designed to prevent attorneys from collecting large fees based on a coupon's face value when few class members ever actually use them, and courts apply added scrutiny to any settlement using this structure.

Last reviewed 2026-08-22.