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May 1, 2007 > Gift Card legislation passes state senate

Gift Card legislation passes state senate

Legislation by Senator Ellen Corbett (D-San Leandro) legislation strengthening consumer rights for gift cards passed the Senate yesterday.

In 2006, more than $8 billion in gift cards went unspent in the United States. Senator Corbett's bill, Senate Bill 250, allows consumers to redeem cash for the remaining value on gift cards, as long as the value is below $20.

"Under current law, a store can refuse giving the remaining value of a gift card back in cash, no matter how small the value," Sen. Corbett said. "It is wrong that retailers are making a profit without providing a service. When an individual purchases a gift card, I don't believe they think they are making a donation to the retailer."

"Too many gift cards are not fully redeemed and carry balances that go unspent," said Norma Garcia, senior attorney with Consumers Union. "This bill will help make sure that California consumers get the full value out gift certificates or cards they buy or receive."
"Every consumer has had the experience of losing the small value remaining on a gift card," Senator Corbett added. "Consumers have the right to the cash value of these gift cards, and my bill makes that happen."

Under current law, most gift certificates are barred from having expiration dates and service fees. However, gift cards with less than $5 can have dormancy fees and a store can refuse to give the remaining value back in cash no matter how small the value left on the card.

SB 250 passed the Senate on a (24-15) vote. It moves to the Assembly for further hearings.

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