California gift card cash out law: what Shopify stores must do about the $15 rule

If a customer in California asks for the last $11 on your gift card in cash, you have to give it to them. Under the California gift card cash out law, any gift card with less than $15 left can be redeemed for cash on request, and since 1 April 2026 the statute says in plain words that electronic gift cards count. For a Shopify store that sells digital gift cards, that is the part that changed the most.

A second bill, SB 1078, gives old printed cards that still say "$10" a grace period until the end of 2028. Below we cover both laws, how to pay out a small balance in Shopify, and the wording for your terms.

The timeline at a glance

What the California gift card cash out law says

The rule sits in Civil Code section 1749.5. The version added by SB 22 says that a gift certificate "with a cash value of less than fifteen dollars ($15) is redeemable in cash for its cash value." Before 1 April 2026 the figure was $10, which is why people still search for the California gift card law under $10.

Four details matter for an online store:

• Electronic cards are covered. SB 22 amended section 1749.45 so that "gift certificate" includes "gift cards and electronic gift cards". A Shopify gift card emailed as a code is an electronic gift card.
• Cash means currency or a check. The statute adds that an electronic funds transfer is allowed "if accepted by both parties". You can offer a bank transfer, but without the customer's agreement it has to be currency or a check.
• Expiry dates and service fees stay banned. The same section still makes it unlawful to sell a gift certificate with an expiration date or a service fee, with narrow exceptions. Our guide to gift card expiration laws covers that side.
• Donated cards have an exception. A card donated to a nonprofit or charity, with nothing given in exchange, doesn't need to be cashed out if it carries a disclaimer in at least 10-point font saying it isn't redeemable for cash under California law.

The obligation starts when the holder asks. Nothing in the text requires you to send money to every customer whose balance drops under $15.

SB 1078: what happens to cards still printed with "$10"

Many physical cards were printed with the old "$10" wording, which understated the customer's right after 1 April. SB 1078 adds Civil Code section 1749.52, which lets an issuer keep selling them until 31 December 2028 if all three conditions are met:

1. The card was manufactured or printed before 1 April 2026.
2. Every point-of-sale device where the card can be bought, loaded or cashed out shows a notice, in at least 24-point font, that a gift certificate with a cash value under $15 is redeemable in cash.
3. You keep records, in the ordinary course of business, that reasonably show when the cards were made or printed.

An issuer that follows those rules is protected from penalties "solely because" of the outdated wording. As we read it, that covers the printed text only, so a customer holding an old card with $13 left still gets $13 in cash.

The bill status page shows SB 1078 chaptered on 20 September 2026, and the author's office says it takes effect on 1 January 2027. That is the default rule in the California Constitution, Article IV, section 8(c), under which a statute takes effect on "January 1 next following a 90-day period" from enactment. Until then there is no safe harbor.

This matters only if you sell printed cards at a counter. Digital cards have no print date, so just update the wording.

Why stores are getting sued over small balances

Ballard Spahr's Consumer Finance Monitor counts nearly 200 lawsuits since 2008 and calls section 1749.5 "the most actively litigated gift card law in the country". In the pattern it describes, someone visits stores with low-balance cards, asks for cash and notes what staff say. A hesitant answer can start a claim, and most cases settle with fees and training commitments.

Public enforcement happens too. Morgan Lewis points to district attorneys, often working across counties, and notes that in October 2025 Chipotle paid $246,000 in civil penalties, restitution and costs to settle allegations of noncompliance. Small stores are less likely targets than chains, but the fix costs almost nothing.

Does it apply to your Shopify store?

If you have a physical shop in California, yes. You sell gift cards to purchasers in the state and you redeem them there.

If you sell online from another state or country, the answer is less clear. Section 1749.5 applies to "any person or entity" that sells a gift certificate, and it doesn't say where the seller has to be. Morgan Lewis describes the law as covering cards "sold for use in California". We found no court decision on an out-of-state online store, so we can't tell you where the line is. If California customers buy your gift cards, the cheap and safe choice is to honor their cash-out requests.

Free promotional codes are a grey area. The cash-out rule is written around gift certificates that are sold, and the section's exceptions for promotional cards deal with expiry dates and depend on details such as how the date is printed. Our guide on Shopify gift cards vs store credit explains why store credit is often the better tool for those cases.

How to cash out a gift card balance in Shopify

At the counter with Shopify POS

Shopify POS has a built-in cash-out. According to Shopify's cash-out help page:

1. Find the card by scanning it, or by searching for the customer who bought it or the order it was sold on.
2. On the gift card details screen, tap Cash out balance. It only appears for eligible cards.
3. Confirm to see the amount, open the cash drawer and hand over the cash.

The conditions are that the card must be active and unexpired, the balance must be under $15 USD or the equivalent in your currency, the store must accept cash (POS can't cash out to a card or other method), and staff need the "Cash out gift cards" permission or manager approval. Give that permission to everyone who works the till, because a cashier who has to go find a manager is exactly the hesitation the lawsuits are built on.

Shopify's changelog of 5 June 2026 adds GiftCardCashOutTransaction (API version 2026-07) for balances "paid out through a point of sale (POS) system". Earlier versions reported it as a plain debit, so ask whether your accounting integration reads the new type.

Online, without a till

There is no Shopify gift card cash out button for online stores. When a customer emails, handle it by hand:

1. Check the card. The admin shows only the last four characters of each code, so ask for those plus the order number, and confirm the balance.
2. Agree on how to pay. A check, or a bank transfer or PayPal if the customer agrees.
3. Pay, then bring the balance to zero. Shopify says "gift card balances can't be edited directly from the Shopify admin" (manage gift cards). The native option is to deactivate the card, which is permanent. Since you pay out the whole balance, that works, but the card won't show how much was paid or why.
4. Write it down. Date, last four characters, amount, payment reference, who handled it.

GiftmintGift cards with emails that carry your logo, delivery on the day the buyer picks and a balance check in your store.See how it works

This is where an app helps. We build Shopify apps, and Giftmint lets you add or remove balance, with a reason, on the native Shopify gift cards it issues or imports and keeps that history, so "California cash-out, check #1042" sits on the card itself. Other gift card apps adjust balances too; our roundup of gift card apps for Shopify compares them.

Update your terms, emails and receipts

Plaintiffs look for terms that still say $10. Check every place your gift card rules appear:

• The gift card product page, FAQ and terms of service.
• The "New gift card" and "Gift card receipt" emails that Shopify lists in its gift card overview (Settings, Notifications).
• Printed cards, carriers, in-store signs and saved support replies.

A line you can adapt for your terms:

Put it where people read it, such as the gift card email, not only deep in your terms.

Train staff and keep records

The right answer to "can I get the $8 left in cash?" from a California customer is "of course". Ballard Spahr suggests periodic refreshers for front-line staff rather than one-off training.

Keep a log of every cash-out request, the date your terms and emails changed, and, if you sell printed cards, proof of when they were printed, which SB 1078 requires.

Gift card laws by state: other cash-out thresholds

California has the highest threshold of the states we checked, but not the only rule. These are the states whose statute text we checked on an official source:

Secondary summaries also list Colorado, Maine, Massachusetts, Oregon and Rhode Island, but we couldn't open their current official text, so we left them out. Note that Shopify's help page lists the same under-$15 limit for POS cash-out without mentioning any state, so check your own state's threshold before relying on it.

Your checklist

• If you sell gift cards to California customers, online or in person, treat the law as applying.
• Replace "$10" with "$15" in your terms, product page, FAQ and saved replies.
• Add the cash-out line to the "New gift card" and "Gift card receipt" emails.
• Give POS staff the "Cash out gift cards" permission and run one test.
• Write a procedure for online requests: check, agree on payment, pay, zero the balance, log it.
• For printed cards made before 1 April 2026, put up the 24-point notice and keep print-date records.
• Check the rules in other states where you have shops.

For most stores this takes an afternoon. If you want online payouts recorded on the card, Giftmint does that on the native Shopify gift cards it issues or imports, and the setup guide shows how to add it to your theme.

Frequently asked questions