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Are Expiration Dates on Gift Certificates and Gift Cards Legal?

Written By: Melissa C. Marsh, Esq., California Business Attorney, April 2012 Add to Favorites
California Law on Gift Cards and Gift Certificates.

In California, California Civil Code Sections 1749.45-1749.6 prohibit the inclusion of an expiration date, service fee, and dormancy (non use) fee on most gift certificates and gift cards (if purchased) from a California retailer for use with the retailer and/or its affiliates. In addition, pursuant to California Civil Code Section 1749.5(b), ALL gift certificates sold after January 1, 1997, are redeemable in cash for its cash value, or subject to replacement with a new gift certificate at no cost to the purchaser or holder. Although the seller gets to choose whether to issue a refund or replacement, effective January 1, 2008, any gift certificate with a cash value of less than $10 is redeemable in cash for its cash value. This is true even if the terms of your gift certificate or gift card state otherwise. See, California Civil Code Section 1749.51 and 1749.5(b)(2).

Exemptions When A Gift Card Issued in California Can Have an Expiration Date.

Pursuant to California Civil Code Section 1749.5(d), certain gift certificates or gift cards sold after January 1, 1998, are not subject to any of the above rules (and may in fact contain an expiration date) IF they contain an expiration date in capital letters in at least 10-point type on the front of the card AND are:

  1. Distributed by the issuer to a consumer without charge under an awards, loyalty or promotional program (California Civil Code Section 1749.5(d)(1)); OR
  2. 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 is 30 days or less after the date of sale (California Civil Code Section 1749.5(d)(2)); OR
  3. Issued for perishable food products (California Civil Code Section 1749.5(d)(3)), which does NOT include a meal sold by a restaurant.
With the recent increase in daily deal sites, it should be noted that many of them may in fact be subject to California's prohibition on expiration dates. Recently, Groupon, Inc. settled a 2011 lawsuit for $8.5 Million ( The lawsuit alleged that Groupon's deals should be subject to state laws regulating gift cards and that its expiration dates were illegal).

Tags: California gift card law, California gift certificate law
Posted In: Business Law Bulletin  Corporate Client Bulletin 

 
 
 
 

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Disclaimer: The information presented on this web site was prepared by Melissa C. Marsh for general informational purposes only and does not constitute legal advice. The information provided in my articles and alerts should not be relied upon, or used as a substitute for professional legal advice from an attorney you retain to advise or represent you. Your use of this Internet site does not create an attorney- client relationship. Transmission of this article is not intended to create, and receipt of it does not constitute, an attorney-client relationship. All uses of the contents of this site, other than personal uses, are prohibited. You may print or email a copy of any information posted on this web site for your own personal, non-commercial, use, but you may not publish any of the articles or posts on this web site without the Express Written Permission of Melissa C. Marsh.


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Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.