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Assembly committee advances SB 22 to raise small-value gift-card cash-outs amid fraud and safety concerns
Summary
Sen. John Laird’s SB 22, which would raise the minimum value at which retailers must redeem a gift card for cash, was passed as amended by the committee after debate over fraud, cash-on-hand for small businesses and exemptions for donated cards.
The Assembly Bridal Consumer Protection Committee voted to pass SB 22 as amended, a measure by Sen. John Laird that would raise the amount consumers can redeem from a gift card in cash, and to keep the bill on call for further action.
Laird opened by saying the law that set a $10 cash‑out threshold dates to 2007 and has not been adjusted for inflation. ‘‘My real goal is to deal with an inflationary increase of the amount,’’ he told the committee, saying $15 would approximate the same purchasing power as $10 in 2007. He said the bill’s intent is to benefit consumers who often do not redeem small card balances.
Several consumer groups told the committee they support raising the threshold to restore value to small balances. Danny Kendall of the California Low‑Income Consumer Coalition and Kim Stone of Consumer Watchdog spoke in support.
Retailers, restaurants and trade groups opposed the measure as drafted, urging either a lower number or clarifying changes. Margaret Gladstein of the California Retailers Association said members found high levels of fraud tied to gift-card schemes and that increasing the cash‑out amount would, in their view, increase the incidence and scale of fraud. Marlon Laar of the California Restaurant Association warned small restaurants that the bill would make them ‘‘cash centers,’’ raise safety risks by advertising that merchants hold cash, and could force small operators to abandon gift‑card programs.
Opponents proposed a compromise increasing the threshold to $15 while striking a proposed posting requirement, clarifying the existing exemption for donated cards and tightening some code sections. Laird said he accepted committee amendments that extended the bill’s scope to e‑gift cards and clarified notice and registration provisions. He also said he would continue discussions with stakeholders on the $15 figure and possible future inflation indexing.
Assemblymembers asked whether merchants would be required to pay out cash. Laird responded that current law already allows noncash redemption methods (for example, mailing a check) and the bill does not require merchants to pay out cash on site.
The committee approved the motion to pass as amended; the clerk announced the bill “on call” and reported a 6‑1 tally when the vote was discussed on the floor. SB 22 will be tracked for further amendments to address fraud concerns and clarify donated‑card exemptions.
