I recently received an email from a ScripSmart users asking for advice. Apparently a company was not complying with a state gift card law requiring a cash refund for gift card balances below a certain threshold. After multiple requests, the retailer refused to give her cash back for the funds remaining on the gift card.
Know Your State Laws
There are several states with laws allowing you to get cash back for your gift cards. ScripSmart has a handy page listing each state which has enacted a law for receiving cash back for gift cards. We'll keep that page current.
Here is a list as of today:
- California - gift cards less than $10
- Colorado - gift cards less than $5
- Maine - gift cards less than $5
- Montana - gift cards less than $5
- Rhode Island - gift cards less than $1
- Vermont - gift cards less than $1
- Washington - gift cards less than $5
- Massachusetts - after 90% of the gift card has been redeemed
Exceptions To The Rule
There are always exceptions to the rule. Often states specifically exclude certain types of gift cards from it's laws. For example, promotional cards given away as part of a reward or loyalty program. Another type we've seen excluded is gift cards sold bleow face value for fundraising purposes. In other words, the laws may not be as cut and dry as one might first believe.
What To Do If You Believe a Company Is Not Following The Law
If you are having trouble getting cash back from a particular company, ScripSmart suggests taking a few steps. Remember, it always helps to be nice and speak with a senior member of the staff.
- Find out if the gift card in question is excluded by state laws for any reason.
- Politely point out the specific state law and section code to the company. It may be helpful to bring a pint version of the specific section code in question.
- Continue moving up the chain of command within an organization and inform them of the law which you believe entitles you to a cash refund.
- If your request is still not granted, contact your state's attorney general and file a complaint.
Company's Have Been Sued
In 2009, Starbucks settled a lawsuit in California for not refunding gift cards with a balance under $10. In the end, Starbucks paid $225,000 to settle. Keep in mind, it's entirely possible the company may be unaware of the gift card laws requiring a cash refund and you'll be doing them a favor by bringing it to their attention.