Call Kurtis Undercover: California's Gift Card Refund Law

WEST SACRAMENTO (CBS13) -- More than six years after California's gift card refund law went into effect, not all stores are following the law, a Call Kurtis undercover investigation has learned.

About $1.7 billion in gift cards goes unspent each year -- a figure that has increased in recent years. It's all money stores get to keep.

In California, customers have the right to a cash refund on gift cards and gift certificates, as long as the remaining balance is less than $10. But an undercover Call Kurtis producer found it's not always easy to get cash back, even after mentioning the law.

Which stores are following the gift card law?

Getting change back

With about $9 left on a gift card from Sprouts, a regional produce market and supermarket in Sacramento, Calvin Wong said the store manager rejected his request for cash back.

Wong said he knew California law said a gift certificate "less than ten ($10) Dollars is redeemable in cash for its cash value."

"I'm sure a lot of other people would be like, 'Well, I'll spend another $5,'" he said.

And frequent retail-store shopper Rosalinda Santana said a department store refused to refund her $6.

"They had me so frustrated," she said. "They need to straighten up."

Who's following the law?

Six years after California's gift card law passed, Call Kurtis decided to randomly test several types of retail stores.

How many are following the rules?

First stop: Best Buy.

Our undercover producer buys a bottle of water with our $10 gift card.

"Can I get the remainder in cash?" he asked the cashier.

"Absolutely," she responded, giving us our correct change.

No problem here -- the store passes our test.

Over at Home Depot, we buy something for about $1 with our $10 dollar gift card, and the employee explains their policy.

"If it's under $10 I can give it to you," she said, agreeing to give us the change.

The next stop is a Sports Authority store in Sacramento, where the clerk also gave us our change, passing our test.

"Thanks, have a great day," she told us as we get our correct change.

But at a Walgreens in West Sacramento, our undercover producer doesn't have the same luck.

"Can I get the change back off of the gift card?" he said.

"Uh-uh," the cashier said, gesturing no.

"There's no way to do that?" the producer clarified.

"No," the cashier responded.

He flat out refused to give us our $9 in change, failing our test.

"I thought if it was under $10 I could get change back?" the Call Kurtis producer said.

"There's no cash back on the gift cards," the cashier said.

"I thought there was a state law or something," the producer said.

"There might be, I've heard that also," the cashier said.

Consumers' rights

Senate Majority Leader Ellen Corbett, who wrote California's gift card law, found the Walgreens cashier's response interesting.

Consumer investigator Kurtis Ming asked Corbett about consumers' rights.

"Should consumers have to fight a store like this to get their money back?" he said.

"No, of course not," Corbett said, admitting even she's had trouble getting a store to follow the law.

"I asked for a couple of dollars back," she said, recalling a retail-store experience, "and [the cashier] said, 'We don't do that here.'"

"I said, 'Actually, you do,'" she continued, "'I'm Senator Corbett and I wrote the law. Maybe you could give the cash back."

But what happens if stores don't?

Consumer attorney Stuart Talley said the law doesn't have any teeth, so you may simply be out of luck.

"There's not much a consumer can do, other than file a lawsuit in small claims court," he said. "And most people won't do that for a couple dollars."

"You can't really have a gift card police force," Corbett told Call Kurtis.

Although Corbett said a district attorney can go after a business breaking the law.

"We also decided to test that same Sprouts supermarket Wong said refused to give him cash back.

When our producer asked the clerk for change, he had to check with a manager.

"Uh, I don't know," he said.

But several minutes later, we get our cash.

Sprouts passes our test.

Call Kurtis sent Wong back in to try and collect his gift card balance of about $9.

This time it worked -- he walks out with his change.

"It sounds like they must have gotten educated," Wong said.

In a statement, Walgreens admitted a mistake was made by its cashier at the store Call Kurtis visited.

"We looked into the situation," the statement said.

"We made a mistake in this transaction. In California, if a customer requests it, they should receive cash back on the balance remaining on their gift card. Giving our customers the best possible shopping experience is our constant objective and we regret this error occurred."

"We will retrain employees in the Sacramento area and will also give them a reminder of our gift card policies as they each begin their shifts," the statement continued. "Thank you for calling this to our attention."

Sprouts told Call Kurtis, "We apologize for the fact that a customer was initially denied cash reimbursement and are pleased that we were able to make the situation right. Sprouts works hard to train all of our team members on state laws and our own corporate policies and will continue to do so to ensure all of our customers have a positive shopping experience at our stores."

The law does not apply to credit card-style gift cards with Visa, MasterCard or American Express logos.

If you have an iPhone, CBS Sacramento has built a digital business card with the California Gift Certificate statute on it. You can download the free pass here. If you have an Android, you can download an App such as PassWallet, Pass2U or PassAndroid Passbook viewer to access the digital business card.

You can also print your own wallet-size card here.