In LaGrou v. Ford Motor Company, 2011 WL 2152832 (2011), the Court of Appeal in an unpublished opinion upheld dismissal of a class action against an automobile manufacturer arising from its termination of a credit card incentive program, which had no annual fee but allowed cardmembers to earn a 5 percent rebate (rebate) toward the purchase or lease of a new vehicle. 


The Court of Appeal affirmed that, under Berry v. American Express Publishing, Inc., 147 Cal.App.4th 224, 233 (2007), issuance of a credit card was regulated by the CLRA because the extension of credit is not a tangible chattle.  A credit card has no intrinsic value and exists only as indicia of the credit extended to the cardholder.  A card is thus not a ‘good’ under CLRA.  The Court of Appeal explained:


In this case, Ford furnished a rebate program that allowed cardmembers to accumulate, within prescribed limits, rebates that are subject to the terms and conditions set forth in the 15–page Program Manual. According to the Program Manual, “[r]ebates are good toward the purchase or lease of an eligible new vehicle,” but have no cash value, are nonnegotiable, are subject to change without notice at any time, cannot be redeemed in whole or in part for cash, are not the property of the cardholder, and may not be redeemed unless the cardholder’s account is open and in good standing. Given the limitations and restrictions imposed by the Program Manual on the redemption of rebates, even though qualifying credit card purchases will earn a 5 percent rebate, the card-member may or may not be able to satisfy the conditions for redeeming the rebate. Accordingly, the evidence fails to show that this particular rebate pro-gram is tied to the specific purchase or lease of a vehicle. We therefore conclude that under these facts, the rebate program is neither a good nor a service that is covered by the CLRA. (See Berry, supra, 147 Cal.App.4th at pp. 229–230.) ¶  In addition, Ford alternatively argued below that because its right to terminate the rebate program was fully disclosed in the Program Manual, its termination of the program was permissible under the contract and thus was neither unfair nor deceptive under the CLRA. (Citing Augustine v. FIA Card Servs., N.A., supra, 485 F.Supp.2d at p. 1174 [because the retroactive increase of credit card interest rates was disclosed in the cardholder’s contractual agreement, it was not a deceptive practice under the CLRA].) Although the trial court did not rely on this alternative ground, we are not bound by the trial court’s rationale in reviewing the grant of a motion for judgment on the pleadings. . .    Given that La Grou does not challenge the trial court’s determination that the contract included the Program Manual, which allowed Ford to terminate the program at will, we conclude that the termination of the program was neither unfair nor deceptive under the CLRA. (See Augustine v. FIA Card Servs., N.A., supra, 485 F.Supp.2d at p. 1174.)