Relates to fees for gift cards; limits the amount a merchant may charge for the gift card; prohibits the expiration of such gift cards or certificates with the exception of promotional gift certificates in which such certificates may not expire earlier than 9 years after the date it was issued.
STATE OF NEW YORK
________________________________________________________________________
4629--C
R. R. 177
2021-2022 Regular Sessions
IN ASSEMBLY
February 4, 2021
___________
Introduced by M. of A. SAYEGH, ENGLEBRIGHT, EPSTEIN, GRIFFIN, MAGNAREL-
LI, DICKENS, ABINANTI, JACKSON, DeSTEFANO -- read once and referred to
the Committee on Consumer Affairs and Protection -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee -- again reported from said committee with amend-
ments, ordered reprinted as amended and recommitted to said committee
-- reported and referred to the Committee on Rules -- amended on the
special order of third reading, ordered reprinted as amended, retain-
ing its place on the special order of third reading
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 Assem-bly, do enact as follows:
1 Section 1. Subdivisions 1, 3, 5, and 5-a of section 396-i of the
2 general business law, subdivision 1 as amended by chapter 170 of the
3 laws of 2004 and subdivisions 3 and 5 as amended and subdivision 5-a as
4 added by chapter 329 of the laws of 2016, are amended and a new subdivi-
5 sion 5-b is added to read as follows:
6 1. (a) For the purposes of this section, the following terms shall
7 have the following meanings:
8 (1) "gift certificate" shall mean a [written promise or electronic
9 payment device] certificate, electronic card, or other pre-funded record
10 that: (i) is usable at a single merchant or an affiliated group of
11 merchants that share the same name, mark, or logo, or is usable at
12 multiple, unaffiliated merchants or service providers; and (ii) is
13 issued in a specified amount; and (iii) may or may not be increased in
14 value or reloaded; and (iv) is purchased and/or loaded on a prepaid
15 basis for the future purchase or delivery of any goods or services; and
16 (v) is honored upon presentation[.];
17 (2) "open loop gift certificate" shall mean a gift certificate redeem-
18 able at multiple, unaffiliated merchants or service providers; and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02680-08-1
A. 4629--C 2
1 (3) "promotional gift certificate" shall mean a gift certificate
2 issued for no consideration which includes on the front of the gift
3 certificate (i) a statement indicating that the card is issued for
4 promotional purposes and (ii) the expiration date for the underlying
5 funds.
6 (b) Gift certificate shall not include an electronic payment device
7 linked to a deposit account or which is covered by the exclusion set
8 forth in 15 U.S.C. § 1693I-1(a)(2)(D)(ii), or prepaid telephone calling
9 cards regulated under section ninety-two-f of the public service law.
10 Gift certificate also shall not include flexible spending arrangements
11 as defined in Section 106(c)(2) of the Internal Revenue Code, 26 U.S.C.
12 § 106(c)(2); flexible spending accounts subject to Section 125 of the
13 Internal Revenue Code, 26 U.S.C. § 125; Archer MSAs as defined in
14 Section 220(d) of the Internal Revenue Code, 26 U.S.C. § 220(d); depend-
15 ent care reimbursement accounts subject to Section 129 of the Internal
16 Revenue Code, 26 U.S.C. § 129; health savings accounts subject to
17 Section 223(d) of the Internal Revenue Code, 26 U.S.C. § 223(d), as
18 amended by Section 1201 of the Medicare Prescription Drug, Improvement,
19 and Modernization Act of 2003, Pub. L. No. 108-173; or similar accounts
20 from which, under the Internal Revenue Code and its implementing regu-
21 lations, individuals may pay medical expenses, health care expenses,
22 dependent care expenses, or similar expenses on a pretax basis. Gift
23 certificate also shall not include a prepaid discount card or program
24 used to purchase identified goods or services at a price or percentage
25 below the normal and customary price; provided that [the] any expiration
26 date of the prepaid discount card or program is clearly and conspicuous-
27 ly disclosed. Gift certificate also shall not include payroll cards or
28 other electronic payment devices which are linked to a deposit account
29 and which are given in exchange for goods or services rendered.
30 3. The terms and conditions of a gift certificate store credit shall
31 be clearly and conspicuously stated thereon. Terms [and conditions shall
32 include the expiration date, whether any fees are assessed against the
33 balance of the gift certificate, and whether a fee will be charged for
34 the replacement of a gift certificate that is lost, stolen, or
35 destroyed, if any. Additional terms] and conditions including, but not
36 limited to, policies related to refunds, warranties, changes in terms
37 and conditions, the expiration date, if any, the activation fee, if any,
38 the procedure for the replacement of a gift certificate, if any, assign-
39 ment and waiver shall be conspicuously printed: (a) on the gift certif-
40 icate; or (b) on an envelope or packaging containing the gift certif-
41 icate, provided that a toll free telephone number to access the
42 additional terms and conditions is printed on the gift certificate; or
43 (c) on an accompanying document, provided that a toll free telephone
44 number to access the additional terms and conditions is printed on the
45 gift certificate.
46 5. (a) No person, firm, partnership, association or corporation shall
47 charge or assess, or sell or issue any gift certificate subject to, any
48 activation fee, retroactive [fees shall be assessed against a gift
49 certificate.
50 (b) No monthly] fee, redemption fee, service [fees may be assessed
51 against the balance of a gift certificate prior to the twenty-fifth
52 month of dormancy] fee, dormancy fee, latency fee, administrative fee,
53 handling fee, access fee, periodic fee, renewal fee, re-loading fee, or
54 any other fee of any kind, other than an open loop gift certificate
55 subject to an initial one-time activation or issuance fee reasonably
A. 4629--C 3
1 related to the cost of the issuer issuing the open loop gift certificate
2 and which shall in no event be in excess of nine dollars.
3 [(c) A service fee may be assessed after the twenty-fourth month of
4 dormancy provided that any such fee shall be waived and the gift certif-
5 icate replenished to its value prior to such fees being assessed where
6 the holder of such gift certificate presents the certificate within
7 three years of issue] (b) No person, firm, partnership, association or
8 corporation shall sell a gift certificate that has a face value or
9 balance that declines as a result of the passage of time or the dormancy
10 of the gift certificate.
11 [(d)] (c) For the purposes of this subdivision, "dormancy" shall mean
12 non-use of a gift certificate. Use of a gift certificate shall include,
13 but not be limited to, adding value, or purchases.
14 5-a. It shall be unlawful for any person to sell or issue a gift
15 certificate other than a promotional gift certificate where the underly-
16 ing funds are subject to an expiration date, provided that a gift
17 certificate may be subject to an expiration date which is not earlier
18 than [five] the later of nine years after the date on which the gift
19 certificate was issued, or the date on which funds were last loaded [to
20 a store gift card]. The terms of expiration of a gift certificate, if
21 any, shall be clearly and conspicuously stated on [the] such gift
22 certificate.
23 5-b. A gift certificate, other than an open loop gift certificate or a
24 promotional gift certificate, with a remaining value of less than five
25 dollars may be redeemed upon request for its cash value.
26 § 2. This act shall take effect one year after it shall have become a
27 law.
