If enacted, SB 22 will significantly affect businesses and consumers alike. For businesses that issue gift certificates, there will be a need to adapt existing policies and practices to comply with the new redemption rules, ensuring that signage at the cash register adequately informs consumers of their rights to cash redemption. The bill also addresses previous concerns that smaller value certificates could lead to unclaimed funds, thereby allowing consumers more equitable access to their financial resources.
Summary
Senate Bill 22, introduced by Senator Laird on December 2, 2024, amends Section 1749.5 of the California Civil Code concerning gift certificates. The existing law allowed for gift certificates with a cash value of less than $10 to be redeemable in cash. SB 22 increases this cash redemption threshold to $25, adjusted annually for inflation based on the California Consumer Price Index. This change aims to enhance consumer protection by allowing holders of gift certificates to redeem greater amounts in cash, rather than being limited to lower sums.
Contention
The introduction of SB 22 is not without contention. Critics argue that raising the threshold to $25 might disincentivize businesses from issuing gift certificates altogether, as they may fear financial losses if too many certificates are redeemed for cash. Some point out the potential for businesses to add service fees or other limitations in response to these changes, possibly undermining the intended goal of consumer protection.