AB 761

This bill regulates the sale and redemption of gift certificates, gift cards, and

similar items (gift obligations). The bill prohibits the following: 1) failing to honor

a valid gift obligation; 2) selling a gift obligation that is subject to an expiration date;

3) reducing the value of a gift obligation except for the sale price of goods or services

provided to the bearer; and 4) reducing the value of a gift obligation as a condition

of disclosing the value of the gift obligation. Under the bill, the prohibitions

numbered 2) and 3) above do not apply to a gift obligation given or sold for less than

face value to a nonprofit organization, a person who transfers the gift obligation to

another person primarily for the benefit of a nonprofit organization, or to a gift

obligation issued for no consideration. Also under the bill, if a person that owns a

business intends to transfer ownership of the business or otherwise cease to operate

the business, the person may not issue gift obligations that may be redeemed at the

business unless the intended transferee agrees to honor gift obligations issued by the

person. The provisions of the bill do not apply to certain state-chartered financial

institutions to the extent that federal law preempts or prohibits the application of

the provisions of the bill to certain federally chartered financial institutions.

The Department of Agriculture, Trade and Consumer Protection or a district

attorney may enforce the provisions of the bill by bringing an action for a civil penalty

of up to $10,000. Also, the bill creates a private right of action in which a person may

recover the greater of twice the person's pecuniary loss or $200 for each violation.