California has signed a transition measure for businesses holding gift cards printed with an outdated cash-redemption threshold. Governor Gavin Newsom approved Senate Bill 1078 on September 20, allowing qualifying old stock to be sold through the end of 2028 without reducing customers' right to recover balances below $15. [S01] [S02]
The immediate commercial problem came from the Santa Cruz Beach Boardwalk. Its operator, the Santa Cruz Seaside Company, had roughly one million cards printed with the previous wording: an estimated $250,000 of inventory representing about two years' supply, according to Senator John Laird's office. [S01]
The measure takes effect on January 1, 2027. Its significance for the gift card industry is the separation of two obligations: what an issuer has already printed on a physical card and what it must actually pay a customer who asks for a qualifying cash redemption. [S01] [S02]
The business problem behind the bill
The Boardwalk is an admission-free amusement park, operated by a private company rather than local government. Its business encompasses rides, arcades, food and retail, with customers paying for activities after entering the site. That makes stored value part of everyday park operations, rather than simply a seasonal present sold at a checkout. [S04]
The current MyBoardwalk Card illustrates that role. Paid points cost $1 each and can be spent across rides, attractions, games, food, retail and photo services. Customers can reload cards around the park and share them with family or friends. Promotional bonus points have a narrower acceptance range. [S05]
This operating model helps explain why the park would carry a substantial supply of physical cards. A card can move between several types of purchase during a visit and then retain value for another day. The park says its points do not expire. [S05]
For the sponsor, the bill protects a sunk production expense. The reported $250,000 concerns printed inventory; it is not a disclosed amount of customer balances, breakage revenue or cash refunds. Treating those figures as interchangeable would exaggerate what the legislation saves. No forecast of avoided replacement costs or future redemption volumes was disclosed. [S01]
Boardwalk spokesperson Kris Reyes described the practical benefit as being able to use existing cards while continuing to honor the law. Santa Cruz Seaside Company sponsored the measure, which Laird authored with Assemblymember Gail Pellerin as a coauthor. [S01]
What changes, and what customers retain
California's underlying threshold rose from less than $10 to less than $15 on April 1, 2026. SB 1078 creates a conditional route for selling cards that still show a lower threshold. It does not restore the old cash-out limit. [S01] [S02]
The signed law adds Section 1749.52 to the Civil Code. To qualify, a card must have been manufactured or printed before April 1, 2026. The issuer must retain ordinary business records reasonably demonstrating that date. It must also display a notice in at least 24-point type at every point-of-sale device where a gift certificate can be purchased, loaded or redeemed for cash. [S02]
The required notice explains that a gift certificate with a cash value below $15 is redeemable for that value in cash. Compliance protects the issuer from civil or criminal penalties solely arising from the lower threshold printed on the card. It is not a general exemption from consumer-protection obligations. [S02]
| Date | Significance |
|---|---|
| April 1, 2026 | Higher cash-redemption threshold began; cutoff for qualifying printed stock |
| September 20, 2026 | Governor approved SB 1078; filed as Chapter 420 |
| January 1, 2027 | Transition measure takes effect |
| December 31, 2028 | Final date for selling qualifying older cards under this provision |
Sources: signed legislation, legislative history and the author's announcement. [S01] [S02] [S03]
Relief shifts the burden to the point of sale
The business benefit is specific: existing physical stock can remain usable. The corresponding operational burden moves to notices and records. A business with several loading and redemption locations has to account for each relevant device, not simply place a statement on its website. That follows from the provision's point-of-sale requirement. [S02]
For card manufacturers and programme managers, the case exposes a tension in bulk procurement. A long production run can leave an issuer with years of printed legal language when the law changes. Separating card artwork, transaction systems and customer communications therefore matters commercially as well as legally. This is an operational implication of the case, not evidence that other issuers hold a similar amount of obsolete stock.
The Boardwalk gains time to consume inventory. Customers retain the higher statutory redemption threshold. The outcome will depend on the less visible work between those two positions: accurate notices, records that support the production date and a redemption process that follows the law rather than the old text on the card.
This is journalistic reporting, not legal advice.
Image credit: JinCA / Wikimedia Commons, July 2010. Resized, reformatted and cropped for the social image. The photograph and adapted image are licensed under CC BY-SA 3.0.
In this article
Suzie Elis
Suzie Elis covers gift card products, digital gifting and distribution for Gift Card News.