California raises gift card cash-out limit to US$15

As many companies operating in California know, since 2008, California has required that gift cards with a value of less than US$10 be redeemable for cash upon the card holder’s request. Effective April 1, 2026, the threshold is increased to US$15, and any gift cards with a value of less than that amount must be redeemed for cash upon request. This is the first such increase since the cash redemption law was passed over fifteen years ago.

With this change, companies offering gift cards for use in California should:

• Update their written policies for redeeming gift cards to reflect the increased threshold
• Update training for cashiers, management and other front-end staff
• Revise and update language in gift card terms and conditions, including those posted online and on the reverse side of physical cards
• Update any point-of-sale systems that provide automatic refunds of gift card amounts below the required threshold

California district attorneys are very active in enforcing the gift card redemption requirement, and several counties often band together and form task forces to pursue large companies. For example, as recently as October 23, Chipotle agreed to pay US$246,000 in penalties to settle allegations of violations of the gift card redemption law, in an enforcement proceeding brought by district attorneys for the counites of Los Angeles, Sonoma, Shasta and Ventura. Class action lawyers have also been active in pursuing alleged violations of the gift card law.