What's happening
This bill prohibits expiration dates and most fees on gift cards and certificates, sets redemption rules, and adds consumer protections.
Why it matters
Eliminates expiration dates and most fees on gift cards and certificates. , meaning consumers can use their balances indefinitely and are protected from losing value due to time or inactivity, except for very limited dormancy fees under strict conditions.
Requires clear, upfront disclosure of any allowed fees. , such as inactivity (dormancy) charges, ensuring consumers are fully informed before purchase and can avoid surprises when using their gift cards.
Makes it easier to get cash back for small balances. if a gift certificate’s value is under $10, the holder can redeem it for cash, preventing the issue of unspent, unusable “leftover” amounts.
Adds protections for group gifting and promotional cards. , including mandatory refund rules for contributors if a group gift card isn’t redeemed, and allows certain exceptions (like promotional or charity cards) but only if expiration or fee terms are clearly stated.
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Who cares
Headline styles
Ban Gift Card Expiration Dates
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to consumer protection
- Referred to consumer protection
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1689
2017-2018 Regular Sessions
IN SENATE
January 10, 2017
Introduced by Sen. AVELLA -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection
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
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 396-i of the general business law is REPEALED and a new section 396-i is added to read as follows:
§ 396-i. Gift certificates and gift cards. 1. For the purposes of this section:
(a) the term "gift certificate" shall mean a written promise in a specified amount which cannot be increased in value on the face thereof and purchased by a consumer in exchange for payment to provide merchandise or service in a specified amount or of equal value to the bearer of the certificate.
(b) "gift cards" shall mean a card which may be purchased by a consumer in exchange for payment to provide merchandise or service in a specified amount of equal value to the bearer of the card.
2. It is unlawful for any person or entity to sell a gift certificate or gift card to a purchaser that contains any of the following:
(a) An expiration date; or
(b) A service fee, including, but not limited to, a service fee for dormancy, except as provided in subdivision six of this section.
3. (a) Any gift certificate sold after January first, nineteen ninety-seven, is redeemable in cash for its cash value, or subject to replacement with a new gift certificate at no cost to the purchaser or holder.
(b) Notwithstanding paragraph (a) of this subdivision, any gift certificate with a cash value of less than ten dollars is redeemable in cash for its cash value.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01227-01-7
S. 1689 2
4. A gift certificate sold without an expiration date is valid until redeemed or replaced.
5. This section does not apply to any of the following gift certificates issued on or after January first, nineteen hundred ninety-eight, provided the expiration date appears in capital letters in at least ten-point font on the front of the gift certificate:
(a) Gift certificates that are distributed by the issuer to a consumer pursuant to an awards, loyalty, or promotional program without any money or other thing of value being given in exchange for the gift certificate by the consumer;
(b) Gift certificates that are donated or sold below face value at a volume discount to employers or to nonprofit and charitable organizations for fundraising purposes if the expiration date on those gift certificates is not more than thirty days after the date of sale; or
(c) Gift certificates that are issued for perishable food products.
6. Paragraph (b) of subdivision three of this section does not apply to a dormancy fee on a gift card that meets all of the following criteria:
(a) The remaining value of the gift card is five dollars or less each time the fee is assessed;
(b) The fee does not exceed one dollar per month;
(c) There has been no activity on the gift card for twenty-four consecutive months, including, but not limited to, purchases, the adding of value, or balance inquiries; and
(d) The holder may reload or add value to the gift card.
7. A statement is printed on the gift card in at least ten-point font stating the amount of the fee, how often the fee will occur, that the fee is triggered by inactivity of the gift card, and at what point the fee will be charged. The statement may appear on the front or back of the gift card, but shall appear in a location where it is visible to any purchaser prior to the purchase thereof.
8. An issuer of gift certificates may accept funds from one or more contributors toward the purchase of a gift certificate intended to be a gift for a recipient, provided that each contributor is provided with a full refund of the amount that he or she paid toward the purchase of the gift certificate upon the occurrence of all of the following:
(a) The funds are contributed for the purpose of being redeemed by the recipient by purchasing a gift certificate.
(b) The time in which the recipient may redeem the funds by purchasing a gift certificate is clearly disclosed in writing to the contributors and the recipient.
(c) The recipient does not redeem the funds within the time described in paragraph (b) of this subdivision.
9. For purposes of this section, "cash" includes, but is not limited to, currency or check. If accepted by both parties, an electronic funds transfer or an application of the balance to a subscriber's wireless telecommunications account is permissible.
§ 2. This act shall take effect on the ninetieth day after it shall have become a law and shall apply to gift certificates and gift cards issued on or after such date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.