Generally it depends on the jurisdiction. Most Jurisdictions however require the chips to be destroyed. A couple of years back when we were destroying chips for the casino in Iowa I work at... the form that I filled out was for destruction or sale of the chips; I found this interesting I should ask one of the IRGC reps on property. As for California Card Rooms they do not have much regulation so most likely there is no rules for destruction on a state level.

As for the chips we destroyed... Basically we have been using the same chips since late 2001; we have had a couple of re-orders and have had LE chips, but we have not changed design, one thing we do is rotate the chips weekly in our chip bank and vault (some casinos refer to as the main bank) so our chips wear pretty evenly - which is very important, you don't want more than 20 chips to fit in a barrel of a rack or you will end up with variances. We just pulled out what looked like the worst chips and destroyed. We had a ton of $1 and $5's for when we operated a poker room (mainly to train EE's for the one that was opened at Horseshoe in 2006), so that's what we mainly destroyed.