Gift Card Laws in California

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Gift cards can make perfect gifts.
Gift cards can make perfect gifts. (Image: Jupiterimages/Comstock/Getty Images)

Gift cards and certificates are an easy way to give the perfect gift or reward to employees and customers. Some recipients may take a while before they actually use their gift card, however, and both the giver and recipient will be disappointed to find that the card balance has been reduced or the card is no longer valid after a certain time period. Because of these issues and others, California has enacted certain laws to protect purchasers of gift cards and certificates.

Gift Cards in California

Gift cards hold a certain amount of monetary value, either for a specific store or chain stores. They can also be purchased for general use, such as American Express gift cards. Specific laws cover the sale and use of gift cards in California. California law does not cover general use gift cards or certificates if they have expiration dates printed on them. All disclosures for gift cards must be very visible on the face of the card, in 10-point or larger font. Any expiration date or related wording must be printed in all capital letters.

California Laws

No expiration date is allowed for gift cards unless they were received in exchange for loyalty programs or awards, where no currency or other assets changed hands. Additionally, any cards sold below face value or donated to employers or nonprofits for fundraising may have an expiration date. Gift card sellers may choose whether or not they will redeem the card for cash, although as of January 1, 2008, sellers must give the customer cash if the card balance is less than $10.

Gift cards may have fees assessed if the card is not used, as long as all of the following conditions are met: The fee is less than $1 per month; the card has $5 or less remaining on it; the card has had no activity of any kind for two consecutive years; the card can be reloaded with value and the fee amount and conditions are printed in at least 10-point font on the card.

Gift Card Law Information

A copy of the California gift card and certificate laws can be found at Leginfo.ca.gov, under the "CA law" button. A search must be performed for the California Civil Code sections that cover gift cards and certificates. The applicable numbers are 1749.45 to 1749.6. Gift card and certificate laws may also be found at law school libraries and county law libraries. Federal gift card laws also exist, and although they may be different than laws at the state level, the more protective law applies to the customer, regardless of whether it is a state or federal law.

Gift Card Tips for Recipients

Before using a gift card, ask the seller about the card’s redemption rules. Some sellers may redeem the card for merchandise and cash, while others will place any remaining balance on a new card or keep it on the same card but will not pay cash. Ask if the card's value can be reloaded or increased and if there are any fees for not using the card over time or service fees. Use the remaining balances of gift cards and pay the rest of purchases out of pocket. Ask the seller regarding merchandise return policies for anything purchased with a gift card.

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