Dive Brief:

• California’s legislature has passed a bill that would outlaw plastic gift cards, with legislators in the Senate and Assembly overcoming some opposition this month in votes approving the legislation, according to the state’s legislative website.
• About 70% of retail gift cards in California are made from PVC plastic and would be affected by the ban, according to a spokesperson for State Sen. Monique Limón, a Democrat who authored the legislation.
• The bill, SB 728, “would prohibit, beginning January 1, 2027, a retailer from selling, offering for sale, or distributing plastic gift cards, except those that are both usable with multiple unaffiliated sellers of goods and that have the expiration date, if any, printed on the card,” according to the California legislature’s website.

Dive Insight:

Gov. Gavin Newsom, who is also a Democrat, hasn’t indicated whether he will sign the bill, but he has backed environmentally-friendly legislation, including indicating he will sign a separate landmark greenhouse gas emission disclosure bill headed to his desk.

Waste created by scrapped cards pollutes the environment both in landfills and as debris that ends up in oceans. Meanwhile, carbon emissions from energy used to process transactions and manufacture the cards, whether metal or plastic, contribute to greenhouse gases in the atmosphere that absorb and re-radiate the sun’s energy.

All of those effects from plastic cards combine to drive other climate change dynamics that are threatening the Earth’s conditions for life. As a result, some policymakers are seeking to limit their impact.

Card issuers, networks and manufacturers in the payments industry have also begun to consider ways in which they could shrink their carbon footprint as consumers become more attuned to making choices that are positive for the environment.

For instance, U.S. Bank said this month that it would start making some credit cards from recycled plastic and gift card provider Blackhawk Network said it’s working with card network giant Visa to shift from plastic to paper-based prepaid cards.

While most gift cards are still made from plastic, some merchants, including coffee shop chain Starbucks and retailers Apple and Amazon, have begun to make paper-based cards available, according to a report from ABC News.

The bill follows on a California law passed last year that seeks to reduce single-use plastic packaging. This year’s legislation aims to help California jump-start its efforts to comply with that law by also establishing a working group to identify alternatives to single-use plastic.

The bill would let retailers sell their existing stock of plastic gift cards until Jan. 1, 2028. Public transit cards used to pay rail and bus fares aren’t affected by the bill.