This legal guide answers common questions about gift certificates and gift cards sold after January 1, 2004, with respect to California law. Since most of the answers also have exceptions, be sure to read the entire answer. Please be aware that the federal government has also recently enacted regulations on the topic of gift certificates and gift cards, effective August 22, 2010.1 Federal law may pre-empt California law where the terms are inconsistent and federal law is more protective of consumers. Because the federal regulation is so new, specific issues of pre-emption have not been decided by the Board of Governors of the Federal Reserve system, nor have they been litigated. It is the opinion of this office that, where the laws are inconsistent, the law that is most protective of consumers should be followed. For an overview and comparison of federal and California gift card law, please see Tables A and B, attached.
Q.6. What happens if the seller of the gift certificate or gift card files bankruptcy? A. A gift certificate or gift card sold by a seller that seeks bankruptcy protection may have no value. However, the holder of the certificate or card may have a claim against the bankruptcy estate. Sellers that file "Chapter 11" (reorganization) bankruptcy intend to stay in business, so they typically will ask the bankruptcy court for permission to honor gift certificates in an effort to maintain good customer relations. If the bankruptcy court does not allow gift certificates or gift cards to be honored, or if the seller files "Chapter 7" (liquidation) bankruptcy, holders of gift certificates or gift cards are creditors in the bankruptcy case. They have relatively high priority among unsecured creditors in a Chapter 7 case, and may receive some percentage of the certificate's or card's value, but only if the bankruptcy estate has enough assets to pay claims. For information on filing a claim, and other basic information on bankruptcy, see "Consumer Tips on Retail Store Bankruptcies," under the "Publications" tab at www.dca.ca.gov, and then go to the "Consumer Publications" section, for the list of consumer publications. A recently adopted California law is intended to help gift certificate and gift card holders when the seller declares bankruptcy. It requires a seller in bankruptcy to honor gift certificates issued before the date of the bankruptcy filing.25 No court has ruled on the effectiveness of this law.
In the case of a gift card usable with multiple, unaffiliated sellers, ask about expiration dates and any applicable fees. In addition, ask about the locations where the unspent portion of the value can be redeemed, and the manner in which that amount can be redeemed. This is important even for "single seller" cards, many of which can be purchased at an unaffiliated location.27
These easy-to-use flash cards of the 128 civics questions and answers can be used by individuals for self-study or adult educators and students in the classroom to prepare for the 2020 version of the civics test.
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