The Drop app class action lawsuit, filed in September 2024 in the U.S. District Court for the Central District of California, accuses Drop Technologies Inc. of running a rewards program that users could almost never actually cash in. The case, Boukhny v. Drop Technologies Inc., alleges that Drop collected linked credit and debit card data from users while its weekly gift card releases sold out within seconds, leaving members stuck with point balances they had no realistic way to redeem. If you used Drop in California and accumulated points you couldn’t spend, the outcome of this case may affect you.1Truth in Advertising. Boukhny v. Drop Technologies Inc. – Complaint
What Drop Is Accused Of
Drop’s app worked by having users link their credit and debit cards so the company could track purchases and award points on spending, with the promise that those points could be traded for gift cards to popular retailers. According to the complaint, Drop sold or otherwise monetized the purchase-tracking data through retailer partnerships, so the company profited from the arrangement whether or not users ever received anything back.1Truth in Advertising. Boukhny v. Drop Technologies Inc. – Complaint
Rewards did technically exist. Drop used a weekly “gift card drop” system, releasing a limited number of cards at a set time. The complaint alleges those cards sold out within seconds, so most users watched their balances grow with no realistic way to spend them.1Truth in Advertising. Boukhny v. Drop Technologies Inc. – Complaint
The suit brings three claims: fraud, arguing Drop kept advertising a working rewards program while knowing it was functionally unavailable; negligence, for failing to run a system that could deliver on its promises; and a violation of California’s Unfair Competition Law, which prohibits any unlawful, unfair, or fraudulent business practice.2California Legislative Information. California Code BPC 17200 – Unfair Competition Defined The alleged injury isn’t only lost points. Plaintiffs argue users handed over detailed financial information in exchange for rewards that never materialized.
Who Is Covered by the Proposed Class
The proposed class is all California residents who used the Drop app and accumulated points they were unable to redeem for gift cards. Two things define the edge of the group: California residency, and firsthand experience of the redemption problem. If you redeemed all your points, or you live outside California, you likely fall outside this class as proposed.1Truth in Advertising. Boukhny v. Drop Technologies Inc. – Complaint
One caveat matters. The class is still proposed. A judge has not certified it, so the boundaries can change, and if the court denies certification the case cannot move forward on behalf of a large group at all. The named plaintiff could still pursue an individual claim, but no class-wide payout would follow.
Where the Case Stands Now
The complaint was filed on September 13, 2024, and assigned to Judge Andre Birotte Jr. Drop was served on September 18, 2024. As of the most recent public docket entries, no motion for class certification has been filed, and no settlement discussions are publicly reflected.3Justia. Svetlana Boukhny v. Drop Technologies Inc.
The case is early. Discovery and a certification motion come next. If a settlement is negotiated later, the court holds a preliminary approval hearing before any notice reaches class members, with final approval and fund distribution typically following months after that. Cases like this often take years to resolve.
What You Should Do Right Now
There is nothing to file or sign up for yet. No claim form exists, because no class has been certified and no settlement has been reached. Beware of any website asking you to submit a “Drop claim” today.
The useful work is preservation. Save screenshots of your point balance, your account details, and any evidence of failed redemption attempts, including screenshots of sold-out gift card releases and any emails you exchanged with Drop’s customer support. If the class is certified and notice goes out later, that documentation is what will support your claim.
Your Choices if the Class Is Certified and Settles
If the court certifies the class and the parties reach a settlement, you will have three options, each with strict deadlines set by the court.
File a Claim
Filing a claim form with the settlement administrator is how you receive a payment from the settlement fund. The form asks for identifying details, including your Drop account email, and must be submitted by the court-imposed deadline. Miss it and you forfeit your share, with no exceptions. Filing a claim also means agreeing to be bound by the settlement’s release, which gives up your right to sue Drop individually over the same conduct.
Opt Out
Opting out means sending a written exclusion request to the settlement administrator by the deadline in the class notice. You receive nothing from the settlement, but you keep the right to sue Drop on your own. This path usually only makes sense when your individual losses are substantially larger than the expected per-person payout, since most class settlements distribute modest amounts. If you had an unusually large point balance or can document heavy reliance on the rewards, the math may work out differently.
Do Nothing
Doing nothing is the worst outcome. You remain in the class and are bound by the settlement, including the release of your claims against Drop, but because you never filed a claim form, you receive no payment. The administrator has no way to send you money without the form. Inaction costs you both the payout and the right to sue on your own.
The Deadline That Matters if You Opt Out
California’s Unfair Competition Law has a four-year statute of limitations, running from when the alleged misconduct occurred.4California Legislative Information. California Code BPC 17208 – Statute of Limitations Under the Supreme Court’s American Pipe ruling, filing a class action pauses that clock for every potential class member. The pause stays in place until certification is denied or until you opt out.
Here is where people get caught. The tolling protects you while you’re in the class, but once you opt out, the clock resumes and any remaining time is what you have to file. If you’re considering going it alone, calculate how much of the four years had already passed when the class was filed, and treat that as your real remaining window.
Whether a Payment Would Be Taxable
If a settlement is eventually paid, any recovery would generally be taxable income. The IRS looks at what the payment is meant to replace, and exclusions apply mostly to physical injury payments. This case involves unredeemed rewards points and consumer data, not physical harm, so a payout falls in the taxable category. The defendant or settlement administrator would issue a Form 1099, and you would report the amount as income for the year you receive it.5Internal Revenue Service. Tax Implications of Settlements and Judgments Per-person amounts in cases like this are often small, but the 1099 will still arrive.