Senate bill would require retailers to give more cash back to gift-card holders.

In an article that appeared in today's Sacramento Bee, staff writer Claudia Buck reported that "Consumers could get more cash back from unused gift cards under a bill unveiled Tuesday at the [CA] state Capitol.

“Senate Bill 885 by state Sen. Ellen Corbett, D-San Leandro, would require retailers to give cash back on cards if the remaining balance is less than $20. Corbett's 2007 bill established the current limit of less than $10.

“The bill would require the new limit to appear in large type on the card itself. It would also eliminate dormancy fees, which are allowed in certain circumstances.”

The article goes on to state that retailers are prepared to oppose SB 885, “saying it creates cash-register headaches and goes against the purpose of gift cards.”

NRF’s Maureen Riehl believes the under-$20 proposal raises concerns among retailers. California’s $10 cash-back limit is already high, but raising it to $20 is “definitely setting a new bar,” Riehl said.

“It's contrary to what gift cards are supposed to be about,” she added. “It creates some fund-management issues when you're dealing with cash back vs. merchandise.”