AB 894

This bill establishes certain terms and conditions with respect to gift certificates, gift cards, and similar items (gift obligations) that are consistent with federal law concerning such gift obligations.

Specifically, under the bill, no person may sell a gift obligation that has an expiration date that is earlier than five years after the date on which the gift obligation was sold or, if the gift obligation is reloadable, five years after the date on which funds were last loaded to the gift obligation.

The bill also includes limitations with respect to fees charged in connection with gift obligations. Under the bill, no person may impose a dormancy, inactivity, or service fee on a gift obligation unless all of the following apply:

1. There has been no activity on the gift obligation in the one-year period ending on the date on which the fee is charged.

2. The gift obligation states in a clear and conspicuous manner the amount of any such fee that may be charged, how often the fee may be charged, and, if applicable, that the fee may be charged for inactivity.

3. No more than one such fee is charged in any given month.

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 by which a person may recover the greater of twice the person’s pecuniary loss or $200 for each violation as well as the person’s costs and attorney fees.