KB Toys, the nation's largest combined mall and online retailer, has agreed to refund $3 million to consumers to settle a class-action lawsuit that accused it of violating Illinois' Consumer Fraud and Deceptive Trade Practices acts.

The company will give all customers an automatic 30% discount on all purchases through Tuesday, Oct. 14. The discount excludes video games, computer software and hardware, and gift cards.

While denying the accusations in the lawsuit, KB Toys agreed to change its labeling practices and agreed that it will donate toys to charity equaling the value of any monies left in the settlement fund after the close of business on Tuesday.

The consumer suit charged that the retailer the retailer displayed price tags containing two prices -- one, a fictitious base price with a slash through it; the second, an actual purchase price deceptively implying a false discount.

KB Toys, headquartered in Pittsfield, Massachusetts, has 1300 stores nationwide, including 73 in Illinois.