Gift cards are popular in California. Often, loved ones just aren’t sure what to give their friends and family members who seemingly have everything. A gift card can be purchased from a specific store, and there are options from popular lenders like Visa that allow cards to be used anywhere. However, it is important to know one’s rights when dealing with gift cards in California. There are a host of fees that can affect such cards. California laws are in place to protect consumers so that they are not charged improper fees. The following includes some basic information about the different laws in place to protect gift card owners.
Today, most gift cards and certificates cannot expire or include service fees. An exception to the rule is cards that can be used for a number of unaffiliated sellers. If there is an expiration date, it must be clearly printed on the card. Other exceptions include gift cards sold after January 1, 1998 that were issued as part of a rewards or loyalty program, donated below face value to charities and non-profits, and those for perishable food items These cards need to have an expiration date printed in capital letters in 10-point or more font.
Gift cards can not include service fees. Similarly, the law dictates that companies or retail groups cannot charge people for dormancy or lack of use. An exception to this law is those cards that have all of the following:
Cards sold after January 1, 1997 are redeemable for cash and can be replaced for cash. Gift card holders are not charged for this. Cards below $10 are also redeemable for cash. This could be paid in currency or with a check from the seller.
Sometimes businesses and sellers end up having to file for bankruptcy. If this happens, a card no longer has any value. Card owners may have a claim against the seller’s estate. If a business is filing for Chapter 11, they are asking to stay in business and can gain permission to honor gift cards. However, some courts will not grant this permission. If a seller files for Chapter 7, then they are liquidating their assets to pay high priority creditors. Some of these funds may be used for gift cards.
Customers have the right to know what can be bought with a gift card. For example, some retail stores stipulate that certain name-brand items cannot be purchased with such cards. If a card can be used for many unaffiliated sellers, it is appropriate to ask about fees and expiration dates. Sellers should arm customers with information about their rights. Gift card law is included in California Civil Code Sections 1749.45-1749.6. Interested individuals can find such information in county law libraries and online.
California wants to protect customers, which is why there are gift card laws in place. Transparency between sellers and shoppers ensures that both parties know their rights. Understanding fees, redemption practices, and expiration dates is important if people want to make the most of their money.
If you feel you have been subject to unfair fees or card expirations, contact the Law Offices of Frederick Schwartz for a free consultation.