Relates to gift certificates and gift cards; repealer

Title of bill

An act to amend the general business law, in relation to gift certificates and gift cards; and to repeal certain provisions of such law relating thereto

Purpose

To make it unlawful for any person or entity to sell a gift certificate to a purchaser with an expiration date or a service fee, unless the consumer is properly notified, and requires sellers to redeem gift certificates with balances of ten dollars or less for cash at the consumer's request.

Summary of provisions

Section 1 of this bill repeals section 396-i of the general business law and a new section 396-i is added to regulate gift certificates and gift cards. This section makes it unlawful for any person or entity to sell a gift certificate to a purchaser with an expiration date or a service fee, unless the consumer is properly notified, and requires sellers to redeem gift certificates with balances of ten dollars or less for cash at the consumer's request.

Section 2 of this bill states that this act shall take effect on the ninetieth day after is shall have become a law and shall apply to gift certificates and gift cards issued on or after such date.

Justification

Currently, under federal law, the Credit Card Accountability Responsibility and Disclosure Act of 2009 (the CARD Act) provides consumers several gift card protections, including limits on expiration dates and service fees. For example, money on store-issued and bank-issued gift cards cannot expire before five years from the date of purchase or when money what last loaded onto the card. Inactivity fees are prohibited unless cards have not been used in 12 months.

Cards with a network logo-such as Visa or Mastercard, are protected under the CARD Act. Store-issued gift cards also have CARD Act protections, but are subject to additional gift card protections under state laws. Most states have adopted rules that give consumers protections above and beyond CARD Act protections.

In New York-known as a "less restrictive state"-expiration dates and fees that will be charged along with other terms and conditions must be clearly and conspicuously stated on the card, package, or accompanying printed document. No dormancy fees can be charged before the 13t month of inactivity and retailers are required to provide store credit for gift cards.

This bill would enhance protections for consumers in ways many other states have already done by prohibiting expiration dates and service fees in certain situations, and would require retailers to provide cash for gift cards when values drop below ten dollars.

Legislative history

New Bill.

Fiscal implications

To be determined.

Effective date

This act shall take effect on the ninetieth day after is shall have become a law and shall apply to gift certificates and gift cards issued on or after such date.