Answer: With Christmas coming up, I've been getting a lot of questions about gift certificates. Under California law, most gift certificates cannot contain an expiration date, and are valid until redeemed or replaced.
There are exceptions to this rule: (1) certificates issued prior to January 1, 1997; (2) certificates that are distributed under various awards programs; (2) certificates that are sold to employers or to nonprofit and charitable organization for fundraising purposes; (4) and certificates for food products.
California law also bans nearly all service fees on retailer gift cards and gift certificates with one limited exception. On a rechargeable card with a balance of $5 or less, the issuer may charge a dormancy fee of $1 per month after 24 months of inactivity. Even a balance inquiry counts as activity that prevents this fee. All other service fees are prohibited.
California law even allows for the cash redemption of gift certificates. Click here to read the full text of the law regarding gift certificates in California.
About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.