California gift card law bans expiration dates on store-issued gift cards, prohibits most fees, and requires retailers to give you cash back for any remaining balance under $15. These rules are among the strongest consumer protections in the country, but they don’t apply to every card in your wallet.
Store Gift Cards Cannot Expire
It is illegal to sell a gift card in California that carries an expiration date.1Justia. California Civil Code 1749.45-1749.6 – Gift Certificates A card you buy today stays valid until you spend it or replace it. Six months, six years, it doesn’t matter. The statute uses the older term “gift certificate,” but the definition includes plastic gift cards and electronic gift cards.2California Legislative Information. SB-22 Gift Certificates – Compare Versions
If a retailer tells you your card has expired, that’s a violation. There is no clock running in the background on a compliant California gift card.
Fees Are Banned, With One Narrow Exception
California prohibits service fees on gift cards, including dormancy or inactivity fees that shrink your balance over time.1Justia. California Civil Code 1749.45-1749.6 – Gift Certificates A retailer cannot reduce your card’s value simply because you haven’t used it.
A dormancy fee is allowed only when all five of these conditions are met at once:3California Legislative Information. California Code Civil Code 1749.5 – Gift Certificates
- The remaining balance is $5 or less each time the fee is charged.
- The fee is no more than $1 per month.
- The card has been completely inactive for at least 24 consecutive months.
- The cardholder can reload value onto the card.
- The fee terms are printed on the card in at least 10-point font, visible before purchase.
Miss any one of those, and the fee is illegal. A dormancy fee on a $20 balance is illegal. A fee after eight months of inactivity is illegal. The fine print doesn’t save a fee that doesn’t meet every condition.
Cash Back for Balances Under $15
A gift card with a remaining balance under $15 is redeemable in cash in California.2California Legislative Information. SB-22 Gift Certificates – Compare Versions SB 22 raised the threshold from $10 to $15. You can walk in, hand over the card, and ask for the balance in cash rather than trying to spend it down to zero.
Retailers must honor the request. You don’t need to buy anything first. You don’t need to spend the card down further. If the balance is under $15, you’re entitled to cash. This is the protection that keeps small leftover balances from quietly disappearing.
Cards the Law Doesn’t Fully Cover
Three narrow categories of gift cards can carry expiration dates in California, as long as the date is printed in capital letters in at least 10-point font on the front of the card:3California Legislative Information. California Code Civil Code 1749.5 – Gift Certificates
- Cards given to you for free through a rewards, loyalty, or promotional program.
- Cards donated or sold below face value in bulk to employers or nonprofits for fundraising. The expiration date cannot be more than 30 days after the sale.
- Gift certificates issued for perishable food products.
The dividing line is whether you paid full price for the card. If you did, the full protections apply. If it was handed to you free as part of a promotion, the issuer has more room to set an expiration.
Visa, Mastercard, and Other Multi-Store Gift Cards
California’s gift card statute does not cover gift cards that work at multiple unaffiliated sellers, meaning the Visa, Mastercard, or American Express gift cards sold at pharmacies and grocery stores.2California Legislative Information. SB-22 Gift Certificates – Compare Versions The exemption applies as long as any expiration date is printed on the card.
One important wrinkle. A card that works only at affiliated stores under the same parent company does not qualify for the multi-seller exemption. That card is still covered by California’s full protections.
Federal Rules for Bank-Issued Gift Cards
Where California law steps back, federal law fills in. The Electronic Fund Transfer Act covers general-use prepaid cards.4Office of the Law Revision Counsel. 15 USC 1693l-1 – General-Use Prepaid Cards, Gift Certificates, and Store Gift Cards
- A general-use prepaid card can have an expiration date, but it must be at least five years from purchase or from the last time funds were loaded.
- Dormancy, inactivity, and service fees are banned unless the card has been inactive for at least 12 months, the fees are clearly disclosed on the card, and no more than one fee is charged per month.
- Cards distributed for free through loyalty or awards programs are exempt from the fee restrictions.
Regulation E adds an important detail.5eCFR. 12 CFR 1005.20 – Requirements for Gift Cards and Gift Certificates If the physical card expires before the underlying funds do, the issuer must provide a toll-free number and website where you can get a replacement at no charge. The funds themselves must last at least five years.
So a Visa gift card with an expiration date on the plastic doesn’t necessarily mean the money is gone. Call the number on the back of the card to check the balance and request a replacement.
If a Retailer Won’t Comply
A retailer that refuses to cash out a sub-$15 balance, imposes illegal fees, or claims your card has expired is violating California Civil Code Section 1749.5. Most disputes get resolved at the store level. Ask for a manager and reference the statute by section number. Keep your original receipt if you have it, though the law doesn’t condition the cash-out right on producing one.
If the store still refuses, file a complaint with the California Attorney General’s office or your county district attorney’s consumer protection unit. Consumers can also take legal action against businesses that violate the statute, and when a retailer’s practice affects many customers the same way, individual claims can potentially be brought together.