BILL NUMBER: SB 885	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Corbett

                        JANUARY 19, 2010

   An act to amend Section 1749.5 of the Civil Code, relating to gift
certificates.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 885, as introduced, Corbett. Gift certificates: redemption.
   Existing law provides that a gift certificate sold after January
1, 1997, is redeemable in cash or subject to replacement with a new
gift certificate. Existing law also provides that a gift certificate
with a cash value of less than $10 may be redeemed in cash, as
defined, for its cash value. Existing law prohibits the selling of a
gift certificate that contains a dormancy fee, subject to specified
exceptions.
   This bill would require that a gift certificate with a cash value
of less than $20 be redeemable in cash for its cash value, and would
require that a gift certificate contain a statement to that effect.
This bill would also delete the exceptions to the prohibition on the
sale of a gift certificate that contains a dormancy fee.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1749.5 of the Civil Code is amended to read:
   1749.5.  (a) It is unlawful for any person or entity to sell a
gift certificate to a purchaser that contains any of the following:
   (1) An expiration date.
   (2) A service fee, including, but not limited to, a service fee
for dormancy  , except as provided in subdivision (e)
 .
   (b) (1) Any gift certificate sold after January 1, 1997, 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.
   (2) Notwithstanding paragraph (1), any gift certificate with a
cash value of less than  ten dollars ($10)  
twenty dollars ($20)  is redeemable in cash for its cash value.

   (3) A statement shall be printed on the gift certificate in at
least 10-point font stating that any gift certificate with a cash
value of less than twenty dollars ($20) is redeemable in cash for its
cash value. The statement may appear on the front or back of the
gift certificate, but shall appear in a location where it is visible
to any purchaser prior to the purchase thereof. 
   (c) A gift certificate sold without an expiration date is valid
until redeemed or replaced.
   (d) This section does not apply to any of the following gift
certificates issued on or after January 1, 1998, provided the
expiration date appears in capital letters in at least 10-point font
on the front of the gift certificate:
   (1) 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.
   (2) 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.
   (3) Gift certificates that are issued for perishable food
products. 
   (e) Paragraph (2) of subdivision (a) does not apply to a dormancy
fee on a gift card that meets all of the following criteria:
 
   (1) The remaining value of the gift card is five dollars ($5) or
less each time the fee is assessed.  
   (2) The fee does not exceed one dollar ($1) per month. 

   (3) There has been no activity on the gift card for 24 consecutive
months, including, but not limited to, purchases, the adding of
value, or balance inquiries.  
   (4) The holder may reload or add value to the gift card. 

   (5) A statement is printed on the gift card in at least 10-point
font stating the amount of the fee, how often the fee will occur,
that the fee is triggered by inactivity of the gift card, and at what
point the fee will be charged. The statement may appear on the front
or back of the gift card, but shall appear in a location where it is
visible to any purchaser prior to the purchase thereof. 

   (f) 
    (e)  An issuer of gift certificates may accept funds
from one or more contributors toward the purchase of a gift
certificate intended to be a gift for a recipient, provided that each
contributor is provided with a full refund of the amount that he or
she paid toward the purchase of the gift certificate upon the
occurrence of all of the following:
   (1) The funds are contributed for the purpose of being redeemed by
the recipient by purchasing a gift certificate.
   (2) The time in which the recipient may redeem the funds by
purchasing a gift certificate is clearly disclosed in writing to the
contributors and the recipient.
   (3) The recipient does not redeem the funds within the time
described in paragraph (2). 
   (g) 
    (f)  The changes made to this section by the act adding
this subdivision shall apply only to gift certificates issued on or
after January 1, 2004. 
   (h) 
    (g)  For 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.