Gift card cash-out limit to be raised
Senator Ellen Corbett (D- San Leandro) has introduced legislation to force restaurateurs to cash out gift cards that have a cash value of less than $20. The proposal has been approved by the Senate Judiciary Committee and will next be considered by the full Senate floor at any time after April 15. The CRA remains opposed to this legislation and needs your help.
In 2007, Corbett pushed through a similar version of the bill that is the basis for the proposed bill which forces restaurants to cash-out gift cards with a cash value of less than $10. While the CRA opposed the initial legislation signed by the Governor, many in the retail community did not.
The latest proposal, SB 885, is opposed by the CRA and a wide cross section of entities in the larger retail community.
Under SB 885, a restaurant could issue a gift card, incur the fees associated with either the issuance of the card or partnering with other retailers to have such gift cards sold in their locations, and then be forced to pay the full amount upon redemption. With no consumer purchase being made on this transaction, restaurants would face a total loss on such a transaction by allowing individuals to redeem gift cards for cash value of less than $20.
Many gift cards can be purchased online. An unscrupulous individual with a stolen credit card can easily translate the credit into cash by purchasing a gift certificate of less than $20 and simply redeeming them for cash. The bill would allow another mechanism for criminals to circumvent fraud protections built into credit cards, giving them easy access to cash.
Gift cards remain highly popular with the public and as the demand for them continues, SB 885 completely disregards the intent of the purchaser of the card. If people want to give cash for gifts, then they would do just that.
Contact your state Senator today to urge them to vote no on SB 885 (Corbett).
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