On April 1, 2026, California SB 22 raised California’s gift card cash redemption threshold to $15. In February 2026, the California legislature introduced SB 1078, which would provide limited transition relief for issuers holding preexisting gift card inventory that states a cash redemption of $10, California’s previous threshold. SB 1078 passed in the Senate in April and is nearing a vote in the Assembly.
If enacted, SB 1078 would permit an issuer to continue selling certain gift certificates that contain printed language stating a cash redemption threshold below $15 until December 31, 2028. The transition relief would apply only if the gift certificate was manufactured or printed before April 1, 2026 and the issuer maintains records in the ordinary course of business demonstrating the manufacture or print date of the gift certificate. SB 1078 does not alter an issuer’s responsibility to honor the $15 cash redemption threshold, even if a customer seeks to redeem a gift card that states a lower redemption threshold.
The bill also requires issuers of gift cards that disclose a cash redemption threshold of less than $15 to display, at each point-of-sale device where a gift certificate may be purchased or redeemed, a notice in at least 24-point font stating that a gift certificate with a cash value of less than $15 is redeemable in cash for its cash value.
Issuers considering reliance on this transition relief should identify affected inventory, confirm when the gift certificates were manufactured or printed, review the cash-redemption language appearing on those certificates, and evaluate whether its required recordkeeping and point-of-sale notices satisfy the bill’s requirements. Issuers should also ensure that cash redemption procedures and employee training continue to reflect the new $15 threshold.
We will continue to monitor the bill as it moves through the California Legislature.
If you have any questions or would like to discuss the information provided in this Client Alert in more detail, please do not hesitate to contact us:
Jamie Ryan, at jryan@baileycav.com or (614) 229-3247; or
Jameel Turner, at jturner@baileycav.com or (614) 229-3260; or
Joan Rossman, at jrossman@baileycav.com or (614) 229-3220.