Keeping gift-card change
SACRAMENTO - Californians will soon be able to convert leftover gift card balances into extra pocket change.
Starting Jan. 1, a new state law will let residents redeem gift cards for cash if the balance is less than $10.
The new law puts California ahead of three other states that already
have similar cash redemption laws. Currently, Vermont allows cash back
for up to $1, while Washington and Montana laws give money back up to
Sen. Ellen Corbett, D-San Leandro, wrote the bill after becoming
frustrated with plastic gift cards piling up on the top drawer. She
said most often there'd be just a few dollars left on the balance.
"The idea came from my own personal experience and my own
constituents'," Corbett said. "They would go to the store with a gift
card and try to spend it and have a little bit of money left over, and
they weren't able to receive the cash."
Gov. Arnold Schwarzenegger signed the bill in October allowing
consumers to get cash back on their gift cards or gift certificates at
most stores in the state. The law doesn't apply to credit card gift
cards or ones tied to multiple stores, such as mall gift cards.
Heather Chastain of Sacramento carries her share of unspent gift cards
in her wallet. As much as she loves receiving them, the 35-year-old
mother of two welcomes the ability to cash out.
"It's my favorite gift to get, but I stick it in my wallet and
frequently forget about them," Chastain said while strolling past the
gift card cart at Best Buy with her 3-year-old son, Jake, and
7-month-old daughter, Annabel.
"I'm pleased they'll be doing that," she said.
Opponents are worried about fraud.
Milt Moritz, the executive director of the National Association of
Theater Owners of California and Nevada, said the law could make it
easier for credit card thieves to buy gift cards and turn them into
"We're not a bank," Moritz said. "If someone buys a gift certificate
and we have to start refunding, it's an administrative nightmare."
Moritz added that gift card holders should be able to make full use of
their credit because theaters don't just sell tickets; they sell
popcorn, hot dogs and drinks that cost less than $10.
The new law defines a cash refund as currency or check. Wireless
telecommunications companies may electronically credit a person's
The law will apply to any gift certificate or gift card sold after Jan.
1, 1997. Existing state law already prohibits retailers from putting an
expiration date on gift cards.
The cards have been growing in popularity, and Corbett said as much as
$8.2 billion was left unspent on gift cards in America in 2006.
According to a holiday shopping poll by Consumer Reports, gift cards
are the second most popular item consumers were planning to buy this
season. Clothing was No. 1.
Initially, Corbett, who wrote the bill, wanted cash refunds for
balances under $20, but that proposal was met by heavy opposition from
retailers, grocers, businesses and restaurants.
She said she believed $20 was "reasonable" but decided not to fight a
hostile amendment by the Senate Business, Professions and Economic
Development Committee lowering the redemption value.
Corbett said the California Retailers Association dropped its
opposition as a result of the amendment, helping smooth the way for the
bill's passage in both houses on majority votes. Bill Dombrowski,
president of the retailers lobby, said the group "saw no way to stop
"It's a great victory for consumers and gift givers who will know that
the recipients of their gift will be able to get the full value of
their gift," Corbett said.
Corbett urged gift card receivers to hold onto their cards until the new year.
"Don't lose them," she said. "Cash them in."