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Feb 14, 2008 6:28 pm US/Pacific
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Call Kurtis: Gift Card Hidden Camera Investigation
8 out of 10 Stores Failed to Follow New State Law
SACRAMENTO (CBS13) ―
About a hundred billion dollars in gift cards were sold last year. However, nearly ten percent of that value went unused.
Now you can get your piece of that pie in cold hard cash.
But our hidden camera investigation we found out that you're probably going to have to fight for it, even though the law is on your side.
"It's got like five dollars left on it," says Tom Bell of Sacramento when we ask him about the card in his wallet.
A new industry survey by Massachusetts-based TowerGroup shows the unused cash value on those gift cards added-up to an estimated eight billion dollars in 2007.
And that's your money -- why not get it, instead of carrying around that pretty plastic? You can.
A new law (Senate Bill 250; Chapter 640; An act to amend Section 1749.5 of the Civil Code, relating to gift certificates) went into effect at the start of the year that says if you have less than ten bucks left on your gift card, you can ask for cash back, the store has to give it to you.
"Why wouldn't you get it back," wonders Mary Countryman of Natomas. Onetta Rosales of West Sacramento drives the point home saying "You should get your money back. I don't care if it's a dollar."
So we bought ten gift cards and headed to area stores to see who is following the law. We chose the ten at random -- popular, well-established stores. They shouldn't have a problem giving us cash, and keeping the plastic, right?
One by one, we spent our gift cards being careful to bring the balances down below ten dollars. Our hidden camera records the responses.
First stop, a Shell station in Davis. We buy some gas and bottled water, and hand them our gift card, asking for the $8.32 back in cash. The cashier tells us "not on gift cards". We don't argue and leave.
Next it's Target. Can we have our $4.62 back? "No" the clerk says.
Safeway. "Can I get cash back on that?" we ask. "Uh, not on the gift card," we're told. Again we don't argue. "You've got $1.39 left," she politely informs us and we just smile and say "All right, thank you." We take our card and leave.
On to Walgreens. It's a "no" there too.
McDonalds? "Nope."
Blockbuster Video? Surely we can get our "best deal yet" and get our change. The clerk says "no."
After all this rejection, it's a good time for a coffee. Cash back at Starbucks? "No."
How about Peet's Coffee and Tea? "No, not on gift cards."
This really isn't looking good for these retailers. They've had three weeks to train staff on the law to ensure they comply. The law clearly states we're entitled to cash-back under ten dollars, if we ask.
We keep trying and head over to Linens-N-Things. "Can I get cash back on that?" we ask. To our surprise, the clerk says "Yeah." That's our first "yes." She calls the manager over; he has to approve it, and he does. The sharp clerk goes on to inform us "…if it's under ten bucks. Yep. It's a new law." We left impressed.
Then it's on to Pier-1 Imports right next door. We hand the clerk our card and ask for our change back. Cash-back is fine we're told, after the clerk confirms it with her supervisor. We take the money and run.
All said and done, only Pier-1 and Linens-N-Things knew about the law and complied with our requests. Eight-out-of-ten denied us, an 80% non-compliance rate.
"If they're going to pass the law they need to enforce it no matter what it is," consumer Tom Bell tells us, with a bit of frustration in his voice.
There's "...no convenient government agency to go ahead and enforce this," says Kevin Flanagan of the California Department of Consumer Affairs; enforcement is up to you. "If they (the consumer) don't get satisfaction from the clerk, take it to the manager."
But there is a chance that the manager won't know about the law. In that case, "if there's really going to be a fight over this ten bucks I suppose you could take it to small claims court," Flanagan admits.
But both you and the retailer have to ask yourselves – is that worth it?
Our consumer Tom Bell has one more thing to say: "Gimme my fifty cents. I want my four bits. c'mon," he says laughing.
None of the companies involved in our investigation would comment on camera.
However, a few responded by phone call only, like the owner of the McDonald's restaurant we tested:
"I require all of my restaurants to be in full compliance with local, state and federal regulations regarding gift card processing procedures. I will continue to work with my restaurant managers and crew employees to ensure that they are fully complying with our new gift card processing procedures to minimize the chance of error."
Charles Specht,
McDonald's Franchisee
Target responded:
"Target is aware of the new California law that requires merchants to provide cash back upon request to the holder of a gift card with a balance less than $10, and we are complying with that law. We have put the necessary processes in place that allow our team members to give cash back to our guests upon request when their gift card balance is less than $10. We have communicated this change to all Target stores in the state.
During this transition there have may have been some isolated incidents where not all team members were aware of the new law or its requirements. We apologize for any inconvenience and are taking steps to help ensure that our California team members are aware of and complying with the new law".
Shell Corporation said that the station we tested in Davis:
"…is an independently owned station. The information on the law had already been related to stations but the corporate offices will continue to disseminate the information."
Blockbuster Corporate Communications also responded by phone:
"At end of December, we communicated the new law to the stores via company notice.
We will take steps to reinforce compliance and we thank you for bringing this to our attention."
It's unlikely a dispute would ever come down to a small claims court case. The fight would cost more to than $9.99.
The best advice is to politely inform the clerk or manger of the law. Contact the retailer's corporate office if that doesn't work. If you anticipate a problem, print out the
law and bring it with you.
(© MMVIII, CBS Broadcasting Inc. All Rights Reserved.)