Gift certificates.

Senator Laird’s measure would reshape California’s gift-certificate framework by elevating protections for electronic gift cards and increasing the cash-redemption floor for small-value certificates, with the changes becoming operative in April 2026. The core change centers on allowing cash redemption for certificates below a new threshold and extending that protection to electronic forms, aligning that redemption option with traditional paper certificates where the value warrants it.

Key mechanics include expanding the definition of a gift certificate to cover gift cards and electronic gift cards while excluding those usable at multiple sellers, unless the card is usable only with affiliated sellers. The bill also prohibits expiration dates and most service fees on gift certificates, with a carve-out for a dormancy-fee framework that specifies conditions under which a fee may be charged: the remaining balance is five dollars or less, the fee is capped at one dollar per month, there has been 24 months of inactivity, the holder may reload the card, and a clear, at-least 10-point-font notice discloses the fee amount, frequency, triggers by inactivity, and when it will be charged. For certificates sold after January 1, 1997, cash redemption remains available either for the cash value or via replacement at no cost, while a certificate with a cash value under fifteen dollars is redeemable in cash; however, the cash-redeemable treatment does not apply to certificates donated to nonprofit or charitable organizations if a prominent disclaimer states the card is not redeemable for cash.

The bill also introduces a framework around donor-contributed funds toward gift certificates: issuers may accept funds from contributors toward a recipient’s purchase, provided each contributor is offered a full refund if certain conditions are met, including disclosure of the redemption window in writing to both contributors and the recipient and the requirement that the recipient does not redeem within that window. Existing exemptions continue to apply to certificates issued under awards, loyalty, or promotional programs; certificates for perishable foods; and certain volume-discount arrangements for fundraising to nonprofits or charitable organizations, provided the expiration date is displayed in uppercase 10-point font. The overall change emphasizes cash-return options and defined disclosures while maintaining limited exemptions from the new cash-redemption regime.