Leawood, Kan. – October 3, 2025: Recall last year the California Legislator, through Senate Bill 1272 (“SB 1272”), tried to significantly increase the mandatory cash redemption amount for certain types of gift certificates and gift cards from $10 to $25, but the measure ultimately died. See, California Senate Passes Bill to Increase the Mandatory Cash Redemption Amount Card Alert, June 7, 2025 and California SB 1272 Increasing the Mandatory Cash Amount for Gift Card is Dead Card Alert, September 6, 2024.
However, earlier in the 2025 legislative session, a similar bill was introduced in the California Senate, Senate Bill 22 (“SB 22”). Last week, SB 22 was presented to Governor Newsome for signature after being passed by both the Senate and the Assembly. SB 22 will increase the mandatory cash redemption amount for certain types of gift certificates, gift cards and electronic gift cards, from $10 to $15. SB 22, Sec. 3(b)(2). Governor Newsom has 30 days to sign the bill after it is presented to him. If SB 22 becomes law, it will have an effective date of April 1, 2026. Id. at Sec. 3(j).
Specifically, SB 22 defines ”gift certificate” to include “gift cards and electronic gift cards but does not include any gift card usable with multiple sellers of goods or services, provided the expiration date, if any, is printed on the card. This exemption does not apply to a gift card usable only with affiliated sellers of goods or services.” Id. at Sec. 1(a). Thus, the mandatory cash redemption requirement is considered to apply to closed loop gift card programs where the card is redeemable at a single brand or affiliated brands. Further, it likely does not apply to cards that are redeemable at multiple unaffiliated merchants, for example, mall or shopping center gift card programs or open loop gift card programs.
The $15 mandatory cash back redemption also does not apply to gift certificates and gift cards that are “donated to a nonprofit or a charitable organization without any money or other thing of value being given in exchange if the gift certificate has a disclaimer in at least 10-point font that the card is not redeemable for cash under California state law.” Id. at Sec. (3)(c).
Additionally, if SB 22 is enacted the definition of “cash” will remain the same. Currently, the statute provides, “[f]or purposes of this section, “cash” includes, but is not limited to, currency or check. If accepted by both parties, an electronic funds transfer or an application of the balance to a subscriber’s wireless telecommunications account is permissible.” West’s Ann.Cal.Civ.Code § 1749.5(i).
To read California Senate Bill 22 click here: California SB 22.
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