US 2006 Gift Cards and Gift Certificates Statutes and Recent Legislation Resources in United States

US 2006 Gift Cards and Gift Certificates Statutes and Recent Legislation Resources

Connecticut
S.B. 503
Requires retailers holding closing-out sale licenses to (1) honor their gift cards and certificates, (2) allow gift card and certificate holders to redeem them for either consumer goods or their cash value, and (3) include in all advertisements a notice that gift cards and certificates may be redeemed before the store closes. Prohibits them from selling, offering to sell, or advertising the sale of gift cards or certificates after applying for a closing-out sale license.

Hawaii
H.B. 1980
Passed House 3/7/06
Exempts multi-use gift cards from definition of gift certificate.

H.B. 3084
Adds maintenance fees as a fee that is prohibited from being charged to dormant or inactive gift certificates.

S.B. 2096
Exempts multi-use gift cards from definition of gift certificate.

Illinois

H.B. 4205
Passed House 2/21/06
Amends the Consumer Fraud and Deceptive Business Practices Act.  Provides that no person shall sell a gift certificate that is subject to an expiration date or fee on or after January 1, 2007.  Provides that the face value of a gift certificate may not reduced in value and the holder of a gift certificate may not be penalized in any way for non-use or untimely redemption of the gift certificate.  Deletes language requiring that a gift certificate subject to a fee or expiration date contain a statement clearly and conspicuously printed on the gift certificate stating the expiration date or whether there is a fee.

S.B. 2196
Amends the Consumer Fraud and Deceptive Business Practices Act.  Provides that no person shall sell a gift certificate that is subject to an expiration date or a fee.  Provides that the face value of a gift certificate may not be reduced in value and the holder of a gift certificate may not be penalized in any way for non-use or untimely redemption of the gift certificate.  Deletes language requiring that a gift certificate subject to a fee or expiration date contain a statement clearly and conspicuously printed on the gift certificate stating the expiration date or whether there is a fee.

S.B. 2451
Amends the Consumer Fraud and Deceptive Business Practices Act.  Provides that no person shall sell a gift certificate that is subject to an expiration date or a fee. Provides that the face value of a gift certificate may not be reduced in value and the holder of a gift certificate may not be penalized in any way for non-use or untimely redemption of the gift certificate. Deletes language requiring that a gift certificate subject to a fee or expiration date contain a statement clearly and conspicuously printed on the gift certificate stating the expiration date or whether there is a fee.

Iowa
H.F. 600
Relates to the redemption, sale, and issuance of gift certificates.  Provides a definition of “gift certificate” which includes a writing or instrument usable for the purchase of goods, property, or services sold or provided by the seller or issuer of the gift certificate.  Provides that gift certificates shall be considered abandoned property under Code chapter 556 if the gift certificate is not redeemed within three years after the later of the date the gift certificate was purchased or issued or the date of the last transaction using the gift certificate.  Abandoned property is required to be annually reported to the state treasurer who publishes a list of the abandoned property for public view.  Provides, in new Code section 537.3312, that a gift certificate shall be redeemable for its full value andprohibits a seller, issuer, or holder of a gift certificate from assessing any fee or charge against the value of a gift certificate or selling or issuing a gift certificate with an expiration date.  The bill also prohibits a seller, issuer, or holder from imposing any other term or condition that limits the ability of the owner to redeem the gift certificate for its full value, including the ability to receive cash for the unredeemed value of the gift certificate.  A person who assesses a fee or charge, issues a gift certificate with an expiration date, or imposes any other term limiting the redemption of the certificate in violation of new Code section 537.3312 commits a consumer fraud under Code section 714.16 and may be subject to civil penalties and a civil action brought by the attorney general for damages incurred as a result of the violation.  A person in violation of new Code section 537.3312 is also subject to a civil action brought by the injured consumer for penalties in an amount not less than $100 nor more than $1,000 per violation.

Kansas
H.B. 2658
Signed by governor 4/14/06, Chapter 116
Makes it a violation of the Kansas Consumer Protection Act from and after January 1, 2007, to sell a gift card or gift certificate containing an expiration date which is less than five years from the date of purchase. A gift certificate is defined to mean a written promise given in exchange for full or discounted payment or without any money or other thing of value being given in exchange to provide merchandise in a specified amount or of equal value to the bearer of the certificate. A prepaid bank card is defined to mean a general use, prepaid card or other electronic payment device that is issued by a bank or other financial institution in a predenominated amount useable at multiple, unaffiliated merchants or at automated teller machines, or both.

Kentucky
H.B. 259
Creates a new section of KRS Chapter 367 to define “gift card”; requires that gift cards shall not be sold without an expiration date that is at least one year from the date of purchase; prohibits any fees being assessed to deduct the value of the card before the expiration date; and provides that any fees to be assessed must be disclosed.

S.B. 49
Signed by governor 3/24/06, Chapter 28
Creates a new section of KRS Chapter 367 to provide minimum lengths of time for the expiration of gift cards issued by businesses or charitable organizations; limits service charges or fees that may have the effect of reducing the value of the card, and mandates that a gift card sold without an expiration date is valid until redeemed or replaced.  Exempts a general-use, prepaid card or other electronic payment device that is issued by a bank or other financial institution that is usable at multiple, unaffiliated merchants, or at automated teller machines, or both, from the definition of a “gift card.”

Massachusetts
H.B. 3715
Regulates credit backed or bank issued gift cards.

H.B. 3723
Relates to gift certificates.

H.B. 3824
Reinstitutes gift certificates, gift cards and general use prepaid cards as reportable abandoned property if unused three years from the date of issuance or last activity.

H.B. 5012
Prohibits excessive fees on gift certificates and gift cards.

S.B. 2214
Substituted by S.B. 2442 3/21/06
Regulates gift cards, gift certificates and electronic wage cards.

S.B. 2442
Passed Senate 3/22/06
Prohibits excessive fees on gift certificates and gift cards.

Michigan

S.B. 950
Regulates the sale of certain gift certificates by a person engaged in a trade or commerce under the Michigan Consumer Protection Act.

Minnesota
S.F. 3693
Requires a state employer that has an employee recognition program that awards gifts to its employees based on years of service must allow the employees the option of choosing a gift certificate of equivalent value from the Minnesota Historical Society for use in a historical society store or the online store. For the purposes of this section, “state employer” means any state department, office, board, commission, authority, legislative office, judicial office, and the Metropolitan Council.

Mississippi
H.B. 128
Died in committee 1/31/06
Prohibits the sales of gift certificates with expiration dates, service fees or dormancy fees; allows cash redemption or replacement of gift certificates; provide exceptions.

S.B. 2172
Died in committee 1/31/06
Makes unlawful the sale of a gift certificate that contains an expiration date or a service fee, with certain exceptions; provides for application of this law; provides that violations of this act are subject to civil and criminal penalties under the consumer protection statutes.

Missouri
S.B. 685
Prohibits expiration dates or service fees for dormancy on gifts certificates issued by companies.  Allows the consumer to receive the remaining balance of a gift certificate in cash, provided they have already used fifty percent of the original value of the certificate. Violations of the act shall be considered unfair marketing practices subject to the penalties outlined in Section 407.020, RSMo.

Nebraska
L.B. 173
Signed by governor 3/7/06
Relates to the Uniform Disposition of Unclaimed Property Act.  Changes provisions regarding gift certificates.

New Jersey
A.B. 720
Under the provisions of P.L.2002, c.14 (C.56:8-110) a gift certificate issued by a retail merchandise establishment remains valid until the certificate is redeemed, unless conditions and limitations on redemption are disclosed to the purchaser and are conspicuously printed on the certificate.  This bill provides that such gift certificates shall be valid and redeemable at full face value until redeemed.

A.B. 2258
S.B. 1249
Incorporates prepaid bank cards, defined in the bill as a form of gift card, into the existing statutory provisions which regulate the expiration dates and dormancy fees for gift cards and gift certificates generally.  These prepaid bank cards include mall gift cards issued by third party banks or other financial institutions which are usable at multiple, unaffiliated merchants within a particular shopping mall.  By incorporating prepaid bank cards into the existing gift card and gift certificate statutory requirements, the bill: 1) prohibits the expiration of prepaid bank cards within 24 months immediately following the date of sale by the original purchaser of the card; 2) prohibits the charging of a dormancy fee against a prepaid bank card within 24 months immediately following the date of sale, and within 24 months immediately following the most recent activity or transaction in which the card is used; 3) limits the dormancy fee, when applicable, charged against a prepaid bank card to no more than $2.00 per month; and 4) requires appropriate disclosure of the above card expiration and dormancy fee provisions to prepaid bank card consumers.

Ohio
S.B. 33
Signed by governor 4/17/06, Chapter 59
Prohibits the sale of a gift certificate that has an expiration date that is less than two years after the date the gift certificate is issued and prohibits service charges or fees having the effect of reducing the value of the gift certificate.

Oklahoma
H.B. 2635
Signed by governor 4/17/06, Chapter 59
Relates to the Gift Certificate and Gift Card Disclosure Act; adds definition and modifying exemptions.

Pennsylvania
H.B. 311
Relates to dormancy fees on a gift certificate or gift card.

H.B. 552
Signed by governor 11/9/06, Act 138
Defines gift card, gift certificate and qualified gift certificate. Provides for unclaimed property.

Tennessee
H.B. 132
S.B. 385
Requires any retailer issuing a gift certificate to permit the recipient of the gift certificate to redeem 50 percent of the face value of the certificate in cash.

H.B. 1245
S.B. 831
Prohibits gift certificates from expiring unless expiration date is clearly stated on gift certificate; makes violations subject to Consumer Protection Act.

H.B. 1742
Signed by governor 6/20/06, Public Chapter 929
S.B. 2069
Specifies that a gift certificate exempt from the prohibition on gift certificates having an expiration date within two years of issuance are also exempt from the prohibition on service charges or fees being imposed on the gift certificates.

H.B. 2574
Signed by governor 5/5/06, Public Chapter 622
S.B. 2702
Prohibits sale of gift certificates that decrease in value or expire after a certain date.

H.B. 3279
S.B. 3680
Prohibits the sale of gift certificates with an expiration date after July 1, 2006, and the imposition of any fee associated with such gift certificates and requires the redemption of gift certificates for full cash value upon request.

West Virginia
S.B. 780
Passed Senate 3/1/06
Relates to gift certificates generally; defines terms; prohibits expiration dates on gift certificates of less than three years; states exceptions; limits imposition of various fees and charges which reduce the value of a gift certificate; and imposes penalties.

Wisconsin
A.B. 583
Failed to pass pursuant to Senate Joint Resolution 1 5/11/06
Regulates the sale and redemption of gift certificates, gift cards, and similar items (gift obligations). The bill prohibits the following: 1) failing to honor a valid gift obligation; 2) selling a gift obligation that is subject to an expiration date; and 3) reducing the value of a gift obligation except for the sale price of goods or services provided to the bearer. Furthermore, when a person redeems a gift obligation and the resulting balance of the gift obligation is less than $5, the bill requires the person redeeming the gift obligation to refund the balance in cash, upon the request of the person redeeming the gift obligation. The bill also requires a merchant, upon presentation of a gift obligation, to disclose the date when the gift obligation was issued and the remaining balance.  Under the bill, the prohibitions numbered 2 and 3, above, do not apply to a gift obligation given or sold for less than face value to a nonprofit organization or to a person who transfers the gift obligation to another primarily for the benefit of a nonprofit organization.  The Department of Agriculture, Trade and Consumer Protection or the district attorney, under the bill, may enforce the provisions of the bill by bringing an action for a forfeiture up to $10,000. Also, the bill creates a private right of action in which a person may recover the greater of twice the person’s pecuniary loss or $200 for each violation. Violations may also constitute unfair competition or unfair trade practices.

S.B. 292
Failed to pass pursuant to Senate Joint Resolution 1 5/11/06
Regulates the sale and redemption of gift certificates, gift cards, and similar items (gift obligations). The bill prohibits the following: 1) failing to honor a valid gift obligation; 2) selling a gift obligation that is subject to an expiration date; and 3) reducing the value of a gift obligation except for the sale price of goods or services provided to the bearer. Furthermore, when a person redeems a gift obligation and the resulting balance of the gift obligation is less than $5, the bill requires the person redeeming the gift obligation to refund the balance in cash, upon the request of the person redeeming the gift obligation. The bill also requires a merchant, upon presentation of a gift obligation, to disclose the date when the gift obligation was issued and the remaining balance.  Under the bill, the prohibitions numbered 2 and 3, above, do not apply to a gift obligation given or sold for less than face value to a nonprofit organization or to a person who transfers the gift obligation to another primarily for the benefit of a nonprofit organization.  The Department of Agriculture, Trade and Consumer Protection or the district attorney, under the bill, may enforce the provisions of the bill by bringing an action for a forfeiture up to $10,000. Also, the bill creates a private right of action in which a person may recover the greater of twice the person’s pecuniary loss or $200 for each violation. Violations may also constitute unfair competition or unfair trade practices.

S.B. 392

Failed to pass pursuant to Senate Joint Resolution 1 5/11/06
Regulates the sale of gift certificates, gift cards, or similar items (gift obligations).  A seller of a gift obligation must conspicuously disclose to a purchaser any expiration date that applies to the gift obligation and the terms and amount of any service charge that apply to the gift obligation. The disclosure requirements do not apply to a gift obligation that is valid at more than one seller of goods or services.