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September 24, 2020

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Connecticut Gift Card Law Amended to Require Cash Redemptions

With the addition of Connecticut, there are now 12 states that have laws requiring that retailers provide a cash redemption on gift cards that fall below a certain balance. These laws have been the source of class action and government enforcement over the past several years. For example, retailers in California faced government inquiries and dozens of class action filings alleging noncompliance after a similar cash redemption requirement was added to the California gift card law in 2008.

The New Connecticut Rules

Effective October 1, 2016, retailers in Connecticut must provide the purchaser of a gift card with a proof of purchase receipt or gift receipt, in paper or electronic form. If a person uses the gift card and the balance is less than $3.00, retailers must—upon customer request and only with a receipt—provide cash back to the customer. The law does not apply to, among other things, open loop cards, promotional gift cards, or paper gift certificates. The law also exempts retailers that have no retail establishments in the State of Connecticut.

Practical Implications

Retailers should prepare to implement cash redemption procedures for store locations in Connecticut, ensuring that cashiers can provide cash redemptions upon customer request.  In most instances, this can be accomplished most easily through internal policies and procedures that provide guidance to store employees in Connecticut. Retailers should ensure that store managers and cashiers in Connecticut are aware of the new law and ready to honor requests for cash redemption starting in October 2016. Finally, retailers should also review any gift card terms and conditions, FAQs, or other consumer-facing documents or disclosures regarding gift cards to include the availability of a cash redemption in Connecticut.

Copyright © 2020 by Morgan, Lewis & Bockius LLP. All Rights Reserved.National Law Review, Volume VI, Number 180


About this Author

Gregory Parks, privacy and cybersecurity lawyer, Morgan Lewis

Gregory T. Parks counsels and defends retail companies and other consumer facing clients in matters related to privacy and cybersecurity, class actions and Attorney General actions, consumer protection laws, loyalty and gift card programs, retail operations, payment mechanisms, product liability, waste management, shoplifting prevention, compliance, antitrust, and commercial disputes. If it is important to a retail company, Greg makes it his business to know it. He handles all phases of litigation, trial, and appeal work arising from these and other areas. Greg is the co...

Anne Marie Estevez, labor and employment lawyer, Morgan Lewis

Anne Marie Estevez defends clients in complex, class, and collective action employment, Americans with Disabilities Act (ADA), public accessibility, and consumer class action cases in US federal and state court. Fluent in Spanish, she represents a broad range of US and international clients in employment and labor-based cases nationally, from wage and hour to discrimination to trade secrets litigation. Anne Marie also counsels employers nationally in these areas, negotiates high-level executive contracts and terminations, and handles due diligence for complex employment and accessibility matters. She serves as co-leader of Morgan Lewis's retail & eCommerce industry initiative.

Christina Edling Melendi, Morgan Lewis, Securities lawyer

Christina Melendi’s corporate and securities practice focuses on representing public and private corporations and private equity sponsors and their portfolio companies in mergers and acquisitions, asset purchases, joint ventures, private and public equity and debt financings, securities offerings, and other general corporate matters. Christina also assists companies to raise capital in the public markets, including initial public offerings and secondary offerings. Christina counsels clients on SEC reporting and securities law disclosure, annual meeting and proxy related...

Daniel S. Savrin, Morgan Lewis, Litigation attorney

Daniel S. Savrin represents businesses in high-stakes civil and criminal litigation in federal and state courts and in the defense of government investigations with a focus on antitrust, consumer protection, and white collar criminal matters. He is a leader of the firm’s consumer protection defense and automotive industry initiatives.

Michael C. D'Agostino, Morgan Lewis, Commercial Litigation Attorney

Michael C. D’Agostino has broad experience handling complex commercial litigation for corporate and institutional clients in both state and federal courts across the United States and abroad. In his practice, Michael assists clients in responding to governmental investigations and subpoenas, litigation originating in Chapter 11 restructurings, and insurance and reinsurance coverage and related disputes. Michael is also currently serving as a member of the Connecticut Legislature. Continuing his interest in public service, Michael coordinates the pro bono and charitable...