Gift Certificates in California

California law governs the use of gift certificates in this state. Civil Code Division 3, Part 4, Title 1.4A contains Sections 1749.45 to 1749.6 and is entitled “Gift Certificates.” Title 1.4A was added by Chapter 933 in 1996.

Section 1749.45 defines the term “gift certificate” to include specified gift cards. An exemption exists for a gift card, with a printed expiration date on the card, if the card is usable with multiple sellers of goods or services.

Section 1749.5 provides that it is unlawful for any person or entity to sell a gift certificate to a purchaser that contains an expiration date or a service fee. In addition, any gift certificate is redeemable in cash for its cash value, or subject to replacement with a new gift certificate at no cost to the purchaser or holder. Moreover, a gift certificate sold without an expiration date is valid until redeemed or replaced.

However, this section of law does not apply to any of the following gift certificates, provided the expiration date appears in capital letters in at least 10-point font on the front of the gift certificate:

• 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.
• Gift certificates that are 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 on those gift certificates is not more than 30 days after the date of sale.
• Gift certificates that are issued for perishable food products.

Section 1749.51 specifies that any waiver of the provisions of this title is contrary to public policy, and is void and unenforceable.

Section 1749.6 provides that a gift certificate constitutes value held in trust by the issuer of the gift certificate on behalf of the beneficiary of the gift certificate. The value represented by the gift certificate belongs to the beneficiary, or to the legal representative of the beneficiary to the extent provided by law, and not to the issuer. However, this section does not create an interest in favor of the beneficiary of the gift certificate in any specific property of the issuer.