California gift card law

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Trying to revive an old discussion that was closed
http://www.fatwallet.com/forums/finance/979123/

Is this law still valid? I have PF Changs and Cheesecacke factory gift cards and they refused to redeem them for cash for me. all these GCs have value <10$. I even talked to their corporate office and they said that no such law exists and they will not redeem.

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mrcashcow said:   Trying to revive an old discussion that was closed
http://www.fatwallet.com/forums/finance/979123/

Is this law still valid? I have PF Changs and Cheesecacke factory gift cards and they refused to redeem them for cash for me. all these GCs have value <10$. I even talked to their corporate office and they said that no such law exists and they will not redeem.


They are wrong.. Its still valid and I have redeemed for cash at Worst Buy for GCs less than $10.

The law is valid, but getting it enforced is different. Complain to the California AG and see if he/she can help.

Were these gift cards originally purchased in California?

The GCs can be purchased anywhere. They is no way for the giftee know where they were purchased. I think I have even seen ads about buying expired GCs from out of state because they don't expire in CA. But I think there is a new law passed nationally.

Maybe OP can PM chances11 and see if his firm can represent you? I don't see how PF Chang or Cheese Cake Factory is above law. You may get some money when you win...

I too attempted to cash out GCs less than $10 a few times and had always been given the runarounds. I tried complaining to BBB but got bounced back. I would love to see these companies (many are large corp) get sued and be required to post signs that they cash gift cards < $10.

Isn't there a restaurant exemption or distinction ? I recall the rules being different for restaurants

I'm sure this has been mentioned somewhere on FW, but in case it hasn't, has anyone tried buying a bunch of <$10 GC with a CC and then returning the cards for cash? It doesn't seem very worthwhile, but I was wondering if anyone has experience with it.

SIS is correct and gift cards/certificates for restaurants are exempt from the expiration rule. The text of the law:

California Civil Code Section 1749.5, TITLE 1.4A. GIFT CERTIFICATES
This section shall not apply to any of the following gift certificates issued on or after January 1, 1998, provided the expiration date appears in capital letters in at least 10-point font on the front of the gift certificate:

(1) Gift certificates that are distributed by the issuer to a consumer pursuant to an awards, loyalty, or promotional program without any money or other thing of value being given in exchange for the gift certificate by the consumer.
(2) Gift certificates that are sold below face value at a volume discount to employers or to nonprofit and charitable organizations for fundraising purposes if the expiration date on those gift certificates is not more than 30 days after the date of sale.
(3) Gift certificates that are issued for a food product.

I suppose you can make a big stink and tell them you want to buy a t-shirt.

Herb said:   SIS is correct and gift cards/certificates for restaurants are exempt from the expiration rule. The text of the law:

California Civil Code Section 1749.5, TITLE 1.4A. GIFT CERTIFICATES
This section shall not apply to any of the following gift certificates issued on or after January 1, 1998, provided the expiration date appears in capital letters in at least 10-point font on the front of the gift certificate:

(1) Gift certificates that are distributed by the issuer to a consumer pursuant to an awards, loyalty, or promotional program without any money or other thing of value being given in exchange for the gift certificate by the consumer.
(2) Gift certificates that are sold below face value at a volume discount to employers or to nonprofit and charitable organizations for fundraising purposes if the expiration date on those gift certificates is not more than 30 days after the date of sale.
(3) Gift certificates that are issued for a food product.

I suppose you can make a big stink and tell them you want to buy a t-shirt.


I wonder what the reasoning is behind the food product exemption and if it was intended for restaurants or food products in grocery stores?

msdmoney said:   
I wonder what the reasoning is behind the food product exemption and if it was intended for restaurants or food products in grocery stores?


It was intended to apply to food products at grocery stores and not intended to exempt restaurants gift cards generally. My recollection is that there is a CA Attorney General opinion on the matter which construes the exception narrowly (technically, the opinion is on the prior wording of this statute which omitted the word "perishable" -- the later addition of "perishable" was a legislative attempt to narrow the scope).

If you have a vendetta against Cheesecake Factory and PF Chang's you could get someone to put that no in writing and then file in small claims. Kind of a dick move if you do, but then again I like to see consumer laws enforced and nice juicy settlements.

My local Cheesecake factory (Roseville, CA) has redeemed them in the past with no hassles. The cashier ringing me up didn't know in most of my cases but one of the senior cashiers knew the procedure.

My own interesting experiences with the law:

One of the Mexican food chain refused to redeem. Contacted corporate and they referred it back to the store manager/regional manager to fix the problem. They sent me a gift card for free food. My recollection is that I was sent a check for the gift card balance + postage and I had to send back the card by postal mail - fair enough.

One of the fast food burger chains wouldn't cash my gift card. Complained to corporate. Corporate asked the local store manager to resolve it. The store manager called me up and offered that I could come into the store to redeem it and she would honor it. I told her that spending money on gas and going through the hassle seems like a way to not honor the CA law. The manager sent me a money order for the amount on the gift card. When I visit the store again, I am supposed to return the card to the manager.

Most interesting experience. I was at the fruit Company Store. They would not cash my $7 gift card. I mentioned the CA law thing. They finally figured it out after getting 3-4 people involved. It took them some effort to get their computer system to cough up the $7. After it was all done, a lady walks up to us. She said that she was listening carefully to the whole thing and she works for the legislature/assembly woman who had drafted the bill. Gave me her card and offered that I could contact her if ran into future problems with the enforcement of the law. What a coincidence!

By the way, Kohl's store gets the highest marks for honoring the law. When you redeem a gift card or a store merchandise return card and if the card has less than $10 left after the transaction, the card is automatically cashed out. It is somewhat spooky at first since the cashier starts to stash the card in some slot or something and you are ready to protest that you want your card back since it has cash on it, but obviously cash is better. Target is pretty good too - but requires an additional trip to the customer service counter.

PrincipalMember said:   ..... Target is pretty good too - but requires an additional trip to the customer service counter.

Target in the first few months after the law passed was clueless about it when i tried to cash a gc, but now they're ok. The regular cashiers are able to to give you the cash but many of them don't know how so they refer you to customer service. once, the person at customer service was irritated that the cashier did not know how.

Original FW thread is here, tyvm.

There's a link to the original bill. I don't recall any restaurant exemptions. Some places bitch and moan. Just tell them about the law and I suppose if the corporate office tells you to buzz off, I'd threaten to sue. Or just mail them a demand letter to create a paper trail.

Perhaps if the corporate office is not in CA, you jumped too high. Find the VP for CA region or something.

Also write your legislator. They don't do much but they do want to get reelected, and most have caseworkers who can help you if the AG is less than enthusiastic.

Home Depot gives change if under $10 but the ones local to me say they cant just cash it out so have buy $0.20 item and get change. Not sure if fully compliant or not

frugalpete said:   PrincipalMember said:   ..... Target is pretty good too - but requires an additional trip to the customer service counter.

Target in the first few months after the law passed was clueless about it when i tried to cash a gc, but now they're ok. The regular cashiers are able to to give you the cash but many of them don't know how so they refer you to customer service. once, the person at customer service was irritated that the cashier did not know how.


When I worked in retail the front cashiers were always very clueless. I constantly got people at customer service because the cashier sent them to me since they didn't know how to do something. Even exchanges... Store card payments... marking down items for damage. etc.

On the other hand sometimes customers lied about going to the regular registers first. I'm not sure what the logic here was, but every once in a while I would get a customer saying that the front had denied it at times when I knew there were only 2 cashiers and they were people who did CS at times too so they absolutely knew how to do it. Probably some sort of scam or they convinced themselves that it was going to be a problem so they just started with CS... why they felt the need to claim the front had denied it I have no idea.

mespin said:   msdmoney said:   
I wonder what the reasoning is behind the food product exemption and if it was intended for restaurants or food products in grocery stores?


It was intended to apply to food products at grocery stores and not intended to exempt restaurants gift cards generally. My recollection is that there is a CA Attorney General opinion on the matter which construes the exception narrowly (technically, the opinion is on the prior wording of this statute which omitted the word "perishable" -- the later addition of "perishable" was a legislative attempt to narrow the scope).


Here:

http://www.dca.ca.gov/publications/legal_guides/s-11.shtml

the site said:
Certain gift certificates or gift cards11 sold after January 1, 1998, are not subject to any of the rules discussed here. To be exempt, these gift certificates or gift cards must contain an expiration date, if any, in capital letters in at least 10-point type on the front of the card and must be either:

* Distributed by the issuer to a consumer without charge under an awards, loyalty or promotional program; or
* Donated or sold below face value at a volume discount to employers or to nonprofit and charitable organizations for fundraising purposes, if the expiration date is 30 days or less after the date of sale; or
* Issued for perishable food products.

...

California Civil Code Section 1749.5(d)(3); 83 Ops. Cal. Atty. Gen. 243 (2000). The Attorney General's Opinion concluded that a gift certificate for a meal sold by a restaurant may not contain an expiration date. In our opinion, the 2008 amendment to this section clarified and affirmed the Attorney General's position by limiting the exemption to "perishable food products," not just "food."


It only addresses the expiration issue. Nothing mentioned about limitation on redemption. As you said, it is about perishable food. Restaurant gift certificate should not apply here.

motsuka said:   Home Depot gives change if under $10 but the ones local to me say they cant just cash it out so have buy $0.20 item and get change. Not sure if fully compliant or notThat's not the way it's supposed to work. The HD you frequent just has lazy employees wanting you to use self-checkout. The law is great, but as I noted in the original thread, you will have a hell of a time enforcing it at most places I would imagine.

If they're lazy just give them more work -- purchase a $0.20 item, get Cash Back for the balance, return the item for cash.

kickerstarter said:   
It only addresses the expiration issue. Nothing mentioned about limitation on redemption. As you said, it is about perishable food. Restaurant gift certificate should not apply here.

Right. I had a minute to dig up the California Attorney General opinion on the prior version of the statute. Here is a summary quote from the opinion:
Does a gift certificate for a meal sold by a restaurant constitute a certificate “for a food product,” as that phrase is used in section 1749.5, subdivision (c)? We conclude that the exemption is inapplicable in such circumstances and that gift certificates sold by restaurants containing an expiration date are prohibited.

3 words come to mind:
Exercise
In
Frustration

Alcibiades said:   3 words come to mind:
Exercise
In
Frustration


I am not sure what this applies to. Personally, I am really happy that CA has this law - no longer have to keep cards with a few $'s on them. Few retailers haven't yet figured out what to do - but as consumers continue to push them, it becomes better for everybody. I suspect all it needs is a class action law suit against one retailer to get all the others to start bending over backwards to try and redeem gift cards with less than $10 balance automatically.

They need a law where any gift card balance is redeemable!

lray said:   They need a law where any gift card balance is redeemable!That would be very bad for FWF type... look at what credit card law has done to all the 0% BT offers.

mespin said:   kickerstarter said:   
It only addresses the expiration issue. Nothing mentioned about limitation on redemption. As you said, it is about perishable food. Restaurant gift certificate should not apply here.

Right. I had a minute to dig up the California Attorney General opinion on the prior version of the statute. Here is a summary quote from the opinion:
Does a gift certificate for a meal sold by a restaurant constitute a certificate “for a food product,” as that phrase is used in section 1749.5, subdivision (c)? We conclude that the exemption is inapplicable in such circumstances and that gift certificates sold by restaurants containing an expiration date are prohibited.

But we aren't talking about expiration dates. We are talking about cashing out gc under $10.

Are restaurant gc under $10 required to be cashed out? That's the question

There have been several winning lawsuits about this in California. But, you must have an experienced lawyer who knows what he or she is doing. If you need to know more PM me and we can discuss privately.

Trying to enforce this law by discussing with low level clerks (or managers) at a retailer is an exercise in futility.

SUCKISSTAPLES said:   
But we aren't talking about expiration dates. We are talking about cashing out gc under $10.

Are restaurant gc under $10 required to be cashed out? That's the question

Yes. That statute has a single list of exceptions for both the expiration and cash-out rules. There is no special exception that picks up restaurant gift cards, so they must follow the same rules as any other gift card. I was just focused on the "perishable food product" exception since it has caused confusion in the past.

PrincipalMember said:   I suspect all it needs is a class action law suit against one retailer to get all the others to start bending over backwards to try and redeem gift cards with less than $10 balance automaticallyThe law suit against Sports Authority was 4 years ago; do you see anybody bending over?

Alcibiades said:   PrincipalMember said:   I suspect all it needs is a class action law suit against one retailer to get all the others to start bending over backwards to try and redeem gift cards with less than $10 balance automaticallyThe law suit against Sports Authority was 4 years ago; do you see anybody bending over?

Are we talking about the same thing? CA gift card law became applicable from Jan 1, 2008. So if this lawsuit happened before the law (since you said 4yrs ago), who cares. Man - these lawyers are getting really good - they frigging so sue people in anticipation of thing becoming a law :-;

PrincipalMember said:   Alcibiades said:   PrincipalMember said:   I suspect all it needs is a class action law suit against one retailer to get all the others to start bending over backwards to try and redeem gift cards with less than $10 balance automaticallyThe law suit against Sports Authority was 4 years ago; do you see anybody bending over?

Are we talking about the same thing? CA gift card law became applicable from Jan 1, 2008. So if this lawsuit happened before the law (since you said 4yrs ago), who cares. Man - these lawyers are getting really good - they frigging so sue people in anticipation of thing becoming a law :-;

There were a few redemption laws previous to 2008 that had some ambiguity to them. I believe that the intent was to make all gift cards redeemable in cash. The wording however was a bit flawed allowing vendors to view the law differently than the consumers.

The $10 balance was put in effect in 2008 (i think).

How does this affect Groupons? Where does the law define "gift card"???

Unfortunately a lot of people are exploiting this for fraud. Steal credit cards, buy bulk GC, go to another location and redeem for cash. We had someone buy 44 $100 cards a few days ago, couldn't do much except track all the numbers. I'm positive they will get cashed out and we will get a call about a stolen CC.

adaminbremen said:   How does this affect Groupons? Where does the law define "gift card"???
The law is not 100% clear and Groupon has been sued a couple times on this basis. By policy, Groupons are redeemable after their expiration date (if state law requires) for the cash price paid rather than the promotional value. So if you bought a Groupon for $10 that entitles you to $20 worth of stuff, after its stated expiration date and for as long as state expiration law requires, the merchant is supposed to honor the $10 you actually paid rather than the $20 promotional value.

In your example, do you think the under $10 portion of the paid Groupon amount should also be redeemable in cash?

Does a $5 off a $10 purchase count as a gift card? I don't think so.

So what about a $10 off a $10 purchase? Could that be a "gift card" without being a gift card?

bombcar said:   Does a $5 off a $10 purchase count as a gift card? I don't think so.

So what about a $10 off a $10 purchase? Could that be a "gift card" without being a gift card?
no it would not be a gift card, as it is not a stored value card. it would be a coupon.

CptSavAHo said:   Unfortunately a lot of people are exploiting this for fraud. Steal credit cards, buy bulk GC, go to another location and redeem for cash. We had someone buy 44 $100 cards a few days ago, couldn't do much except track all the numbers. I'm positive they will get cashed out and we will get a call about a stolen CC.

I don't get it. How is this related to CA gift card law? You still have to buy $90.01 worth of goods to cash it out. Trust me when I tell you that my car getting stolen had everything to do with this damn $10 CA gift card plan . Now, if the person had bought 460 x $9 gift cards, that would have been something else!

The place where you can exploit the CA gift card law to your advantage is in situations where you are able to buy a small denomination card for a discount. Example: Near Christmas, Borders had something like buy 2x$25 and you received a $10 coupon to spend in the store or something like that or I am making this up for the sake for the example. So the intent was $10 discount on $50. However, you could choose to spend only $15.01 on each gift card and then cash them out. Rounding up the numbers, you now have received $10 discount on $30. Same thing with a living social deal where they had 2x$20 Coldstone gift cards for cheap and you should cash out the card once it reaches below $10 to maximize your discount on the deal.

Me neither. I guess it might be easier to buy GC with a stolen CC and spend them later than buying actual goods and return them for store credit (since you may need to present an ID).

But I like to think that it is just another FWer maxing out their promotional offer for CC CashBack.

Skipping 4 Messages...
kickerstarter said:   My experience is that cashing out of sub-$10 gift card always requires a manager. Some cashier may be able to cash out a sub-$5 GC as a "courtesy".

That said, I am more willing to buy and give gift cards knowing the new law. Only I don't think a lot of people are aware of the law even though it seems to have reported by all news stations. Either people don't read news or the cashiers are playing dumb.


Depends on the store. Some stores always require a manager to give cash out of a register. This includes cashing out gift cards, processing returns, etc... In my experience, most stores process it similar to a return. So, if front-line cashiers are able to process returns, they can process these as well. Some don't know how, some don't know it's possible, but some stores train the employees about this very well.



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