What's happening
This bill bans almost all fees on gift cards, clarifies definitions, and allows cash redemption for cards under five dollars.
Why it matters
Consumers will no longer encounter surprise “activation,” “dormancy,” or service fees on gift cards, ensuring the full value of the card remains intact regardless of how long it is held or used. This change protects the purchasing power of gift cards and discourages companies from eroding their value through hidden charges.
Clearer legal definitions and exclusions for what counts as a gift card or gift certificate help eliminate loopholes and confusion. Consumers, businesses, and regulators will have a more precise understanding of what is covered by the law, making it easier to enforce and comply with these protections.
Allowing cash redemption for gift cards with a balance under five dollars ensures consumers don’t lose out on small, difficult-to-use remaining amounts. This measure prevents companies from profiting off “breakage” (unused small balances) and returns money directly to consumers.
The law specifically excludes certain financial tools (like payroll cards, prepaid discount cards, and health savings accounts) from these rules, targeting its protections at true consumer gift products rather than broader prepaid or payment devices. This focused approach means the law addresses common consumer pain points without unintended consequences for other financial products.
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Ban Gift Card Fees
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Print number 8652a
- Amend and recommit to consumer affairs and protection
- Referred to consumer affairs and protection
- Referred to consumer affairs and protection
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Ban Gift Card Fees
In Senate Committee · Rules · Sponsor Shelley Mayer
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
8652--A
2019-2020 Regular Sessions
IN ASSEMBLY
October 2, 2019
Introduced by M. of A. WEPRIN -- read once and referred to the Committee on Consumer Affairs and Protection -- recommitted to the Committee on Consumer Affairs and Protection in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the general business law, in relation to fees for gift cards
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivisions 1, 3, 5, and 5-a of section 396-i of the general business law, subdivision 1 as amended by chapter 170 of the laws of 2004 and subdivisions 3 and 5 as amended and subdivision 5-a as added by chapter 329 of the laws of 2016, are amended and a new subdivision 5-b is added to read as follows:
1.(a) For the purposes of this section, the following terms shall have the following meanings:
(1) "gift certificate" shall mean a [written promise or electronic payment device that: (i) is usable at a single merchant or an affiliated group of merchants that share the same name, mark, or logo, or is usable at multiple, unaffiliated merchants or service providers; and (ii) is issued in a specified amount; and (iii) may or may not be increased in value or reloaded; and (iv) is purchased and/or loaded on a prepaid basis for the future purchase or delivery of any goods or services; and (v) is honored upon presentation.] certificate, electronic card, or other pre-funded record that evidences the giving of consideration in exchange for the right to redeem such record for goods, services, credit, or money of at least an equal value to the amount shown on, embedded in, or associated with, such record; and
(2) "promotional gift certificate" shall mean a gift certificate issued for no consideration which includes on the front of the gift certificate (i) a statement indicating that the card is issued for
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11662-04-9
A. 8652--A 2
promotional purposes and (ii) the expiration date for the underlying funds.
(b) Gift certificate shall not include an electronic payment device linked to a deposit account, or prepaid telephone calling cards regulated under section ninety-two-f of the public service law. Gift certificate also shall not include flexible spending arrangements as defined in Section 106(c)(2) of the Internal Revenue Code, 26 U.S.C. § 106(c)(2); flexible spending accounts subject to Section 125 of the Internal Revenue Code, 26 U.S.C. § 125; Archer MSAs as defined in Section 220(d) of the Internal Revenue Code, 26 U.S.C. § 220(d); dependent care reimbursement accounts subject to Section 129 of the Internal Revenue Code, 26 U.S.C. § 129; health savings accounts subject to Section 223(d) of the Internal Revenue Code, 26 U.S.C. § 223(d), as amended by Section 1201 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173; or similar accounts from which, under the Internal Revenue Code and its implementing regulations, individuals may pay medical expenses, health care expenses, dependent care expenses, or similar expenses on a pretax basis. Gift certificate also shall not include a prepaid discount card or program used to purchase identified goods or services at a price or percentage below the normal and customary price; provided that [the] any expiration date of the prepaid discount card or program is clearly and conspicuously disclosed. Gift certificate also shall not include payroll cards or other electronic payment devices which are linked to a deposit account and which are given in exchange for goods or services rendered.
3. The terms and conditions of a gift certificate store credit shall be clearly and conspicuously stated thereon. Terms [and conditions shall include the expiration date, whether any fees are assessed against the balance of the gift certificate, and whether a fee will be charged for the replacement of a gift certificate that is lost, stolen, or destroyed, if any. Additional terms] and conditions including, but not limited to, policies related to refunds, warranties, changes in terms and conditions, the procedure for the replacement of a gift certificate, if any, assignment and waiver shall be conspicuously printed: (a) on the gift certificate; or (b) on an envelope or packaging containing the gift certificate, provided that a toll free telephone number to access the additional terms and conditions is printed on the gift certificate; or (c) on an accompanying document, provided that a toll free telephone number to access the additional terms and conditions is printed on the gift certificate.
5. (a) No person, firm, partnership, association or corporation shall charge or assess, or sell or issue any gift certificate subject to, any activation fee, retroactive [fees shall be assessed against a gift certificate.
(b) No monthly] fee, redemption fee, service [fees may be assessed against the balance of a gift certificate prior to the twenty-fifth month of dormancy] fee, dormancy fee, latency fee, administrative fee, handling fee, access fee, periodic fee, renewal fee, re-loading fee, or any other fee of any kind.
[(c) A service fee may be assessed after the twenty-fourth month of dormancy provided that any such fee shall be waived and the gift certificate replenished to its value prior to such fees being assessed where the holder of such gift certificate presents the certificate within three years of issue] (b) No person, firm, partnership, association or corporation shall sell a gift certificate that has a face value or
A. 8652--A 3
balance that declines as a result of the passage of time or the dormancy of the gift certificate.
[(d)] (c) For the purposes of this subdivision, "dormancy" shall mean non-use of a gift certificate. Use of a gift certificate shall include, but not be limited to, adding value, or purchases.
5-a. It shall be unlawful for any person to sell or issue a gift certificate other than a promotional gift certificate where the gift certificate or the underlying funds are subject to an expiration date [which is earlier than five years after the date on which the gift certificate was issued, or the date on which funds were last loaded to a store gift card. The terms of expiration shall be clearly and conspicuously stated on the gift certificate].
5-b. A gift certificate with a remaining value of less than five dollars may be redeemed upon request for its cash value provided that a gift certificate that may be redeemed at more than one merchant shall only be redeemable for such cash value from the merchant from which such gift certificate was acquired.
§ 2. This act shall take effect 1 year after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.