Gift Card Rules To Change for Millions of People Next Year

By Suzanne Blake

Reporter, Consumer & Social Trends

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Gift card rules are changing for millions of people in California next year.

After the state passed SB22, the gift certificate cash value limit will be expanded from $10 to $15, allowing shoppers to gain more money for their unused cards.

Why It Matters

Many Americans buy or receive gift cards and end up never using them, but under state law, California permits gift cards to be redeemed for cash or replaced with a new gift certificate.

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What To Know

Previously, California allowed gift cards sold after 1997 to be redeemed for cash if they were less than $10. Others were redeemable in cash or subject to replacement with a new gift certificate.

The new law makes a gift certificate with a cash value of less than $15 redeemable for cash or its cash value starting April 1, 2026, increasing the limit.

The bill also expands the definition of “gift certificate” to include electronic gift cards.

The changes mean that the minimum balance at which a gift card must be redeemable for cash has increased to a threshold of $15, in line with annual inflation adjustments.

Retailers with physical locations must also clearly post notices informing customers of the cash-out right, the law notes.

The average value of gift cards given to someone else as a gift is $47.91, according to CapitalOne Shopping Research.

Forty-three percent of American adults said they have unused gift cards, with a total value of roughly $23 billion.

What People Are Saying

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “While some have argued gift cards need some additional consumer protections, the specifications of this bill may produce some resentment from businesses who feel like these features will be hard to implement and regulate.”

Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: “The law strengthens consumer protections on unredeemed gift cards by addressing expiration dates and dormancy fees. It prevents companies from imposing inactivity charges or restrictive minimums, ensuring that consumers—not corporations—decide when to use their value.”

What Happens Next

For gift cards sold after January 1, 2004, the updated provisions allow consumers to redeem their cards for cash or cash equivalents, giving them greater flexibility and control over their purchases, experts said.

“It is about time consumers are allowed to get something back as corporations have played games with these liabilities on their balance sheets in the name of profitability,” Thompson said. “Hopefully next will be the reward practices companies have engaged in where they force expiration on unused points.”

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