Northern California Engineering Contractors Association

Where Is It Required by Law to Redeem Gift Cards for Cash

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Did Santa bring you more gift cards during the holiday season? Do you have a stack of partially used gift cards with small credits left? You can exchange them for a larger balance, but if you don`t shop regularly at that merchant, it may not be convenient. At least eleven states/territories currently have laws on exchanging cash gift cards. California is the most generous, with the mandate that any gift card worth less than $10 can be redeemed for cash. In 2009, Congress passed the Credit Card Liability and Disclosure Act (CARD), which established consumer protection for gift cards based on numerous state laws. The law states that gift cards cannot expire within five years of the date of their activation and generally limits the inactivity fee for gift cards, except in certain circumstances, such as if no transaction has taken place for at least 12 months. Federal law creates a lower limit for regulation, leaving room for state regulations on exchanging gift cards for cash and unclaimed property provisions. A linked prepaid card must not contain an expiry date with respect to the underlying balances that can be redeemed using the relevant card, code or device. Requires that no service fee be charged for a gift card unless each of the following is clearly and prominently displayed on the front or back of the gift card in 10-point or more type and printed in such a way that the print is clearly visible to the purchaser of the gift card before the purchaser purchases the gift card: (1) the amount of the service fee; (2) The event or events leading to the collection of the service fee; (3) the frequency with which service fees are charged; and (4) if the Service Fee is charged on an inactivity basis, the duration of the inactivity, which may not be less than three consecutive years of non-use, will result in the collection of the Service Fee. `gift certificate` means a voucher, gift card, prepaid card or similar instrument issued for consideration where the certificate, card or similar instrument can be exchanged for goods, foodstuffs or services, where cash can be paid to the holder of the certificate, card or instrument as part of the redemption transaction; S.B. 6898 Relates to gift certificates and gift cards; prohibits expiry dates and rest service charges in certain cases; and requires retailers to redeem card balances of $10 or less for cash at the consumer`s request. (c) A Gift Card or Gift Card issued prior to November 2, 2006 that contains an expiry date or requires any type of after-sales financing fee and that has not been redeemed abandoned will not be deemed abandoned if the issuer`s policy and practice is cancelled on the 1st. July 2006 consists of forfeiting all fees after the sale and recognizing this gift card or gift card at no additional cost to the cardholder if it is at full face value or after an applicable purchase, regardless of the expiration date.