by: Benjamin Stein

As we’ve previously covered in this blog, some state gift-card laws include a requirement that the card issuer provide cash back to a consumer upon request when their card’s value reaches a certain threshold. California’s law is particularly notable in this regard, providing consumers with a cash-out option when the card value dips below $10.

Home Depot was recently reminded about this requirement the hard way.

On July 12, 2024, the District Attorneys of several California counties announced that Home Depot would pay $750,000 in civil penalties, fees, and restitution to settle a joint enforcement action, after an investigation revealed that it refused to cash-out gift cards as required under the law at multiple stores. (A press release on the settlement is available here.)

In addition to paying the penalty, Home Depot will be required to include a notice on its gift cards that they’re redeemable for cash where required by law, to train employees on this issue, to post notices regarding gift-card redemption at its store Customer Service desks, and – most notably – to program cash-disbursing POS registers to automatically refund in cash the remaining balance of any card worth less than $10.00.

If your business offers gift cards and you are not already familiar with the cash-out requirements of some state laws – and training your frontline employees to comply with these requirements in the relevant states – let this settlement serve as an impetus to get familiar.

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Originally published by InfoLawGroup LLP. If you would like to receive regular emails from us, in which we share updates and our take on current legal news, please subscribe to InfoLawGroup’s Insights HERE.