Q: I’m always getting gift cards on holidays. After one use, I often forget that I ever had them. I tried utilizing the state law that requires a cash refund for any balance under $10. You’d think I was trying to break into Fort Knox! What is the law on this, and how can we get big chain compliance for us little folks?
A: It is estimated that a lot of dollars in gift cards go unspent. For instance, it is not uncommon that gift card purchasers and holders utilize their gift card balance to pay for items with a cost below the total cash value of the gift card, leaving a partial and possibly unusable balance. Consumers are left with small amounts on their cards, which are insufficient to buy anything in the store. The unspent money is of benefit to the retailer, who was paid in full for the gift card.
In order to prevent this untenable outcome, California Civil Code section 1749.5(b)(2) was enacted to provide that any gift card with a cash value of less than $10 is redeemable in cash for its value. Whether that value is $9.99 or $0.01, the consumer is entitled to receive the amount from the issuing retailer.
Note, however, that if the card has a balance greater than $10, and was issued after January 1, 1997, the issuing retailer is given the option either to (1) redeem the gift card in cash for its cash value, or (2) provide a replacement gift card at no cost to the purchaser or holder.
In terms of how to get big chain compliance, if that is not occurring, you could try the Better Business Bureau, or the office of a local (elected) public official, or a letter writing campaign yourself — or if enough people join hands, a class action. I can’t say whether a local prosecutorial agency would take up the fight (e.g., a city attorney), but the law is the law, and if it is being violated, then hopefully the violation is dealt with.
Q: I am having a bit of a situation, so I am asking: What is the difference between a gift card that can be used at a bunch of stores, as compared to a gift card that was bought from a one-store business?
H.L., La Mirada
A: California law permits merchants to impose service fees and expiration dates for cards that can be used at multiple, unaffiliated businesses. The single-business gift card, on the other hand, is not permitted to have expiration dates, service fees or dormancy fees, with limited exceptions. (It is best to review California Civil Code Section 1749.5 in this regard; the code section can be found online).
Gift card resource
The California Department of Consumer Affairs has ample details online, entitled: “FAQs and Tips on Gift Certificates and Gift Cards: Legal Guide S-11.” The online link is dca.ca.gov/publications/legal_guides/s_11.shtml.
Ron Sokol has been a practicing attorney for over 40 years, and has also served many times as a judge pro tem, mediator, and arbitrator. It is important to keep in mind that this column presents a summary of the law, and is not to be treated or considered legal advice, let alone a substitute for actual consultation with a qualified professional.
Are there online law resources I can use instead of hiring a lawyer? Ask the lawyer
How do you get a restraining order? Ask the lawyer
How does an attorney represent a guilty client? Ask the lawyer
Is honking a car horn a First Amendment right? Ask the lawyer