S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6052

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                             March 13, 2013
                               ___________

Introduced  by  M.  of  A.  ORTIZ,  GALEF, WEISENBERG, PEOPLES-STOKES --
  Multi-Sponsored by -- M.   of A. CAHILL,  CLARK,  FARRELL,  GOTTFRIED,
  HOOPER, MILLMAN -- read once and referred to the Committee on Consumer
  Affairs and Protection

AN  ACT to amend the general business law, in relation to the expiration
  or diminishing in value of gift certificates or store credits

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Section  396-i of the general business law, as amended by
chapter 170 of the laws of 2004, subdivisions 2-a, 3, 3-a, 3-b, 3-c  and
5  as  amended  and subdivision 6 as added by chapter 507 of the laws of
2004, is amended to read as follows:
  S 396-i. Acceptance of  [unexpired]  gift  certificates.  1.  For  the
purposes  of this section, "gift certificate" shall mean a written prom-
ise 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.  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. S 106(c)(2); flexible
spending accounts subject to Section 125 of the Internal  Revenue  Code,
26  U.S.C. S 125; Archer MSAs as defined in Section 220(d) of the Inter-
nal Revenue Code, 26  U.S.C.  S  220(d);  dependent  care  reimbursement
accounts  subject to Section 129 of the Internal Revenue Code, 26 U.S.C.
S 129; health savings accounts subject to Section 223(d) of the Internal
Revenue Code, 26 U.S.C. S 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

              

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09522-01-3

A. 6052                             2

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  custom-
ary  price;  provided  that  the 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.
  1-a.  No  person, firm, partnership, association or corporation who or
which issues gift  certificates  or  store  credits,  or  who  or  which
conducts  a  "closing out sale" or "defunct business sale" as such terms
are defined in section five hundred eighty-one of this chapter,  of  the
merchandise of any such person, firm, partnership, association or corpo-
ration,  shall refuse to accept such gift certificate or store credit in
payment for goods or services used  or  bought  for  use  primarily  for
personal,  family  or household purposes, including, but not limited to,
goods or services advertised on sale or pursuant  to  a  liquidation  or
close-out[,  provided that if the certificates or the terms of the store
credits limit the period of time during which they may be used, they are
presented for redemption before the expiration of such period of time].
  2. No person, firm, partnership, association  or  corporation  who  or
which  issues  gift  certificates  or  store  credits,  or  who or which
conducts a "closing out sale" or "defunct business sale" as  such  terms
are defined in section five hundred eighty-one of this chapter, shall in
any  manner  restrict  the  holder of a gift certificate or store credit
from electing use of such gift certificate or store credit in  a  manner
not  inconsistent  with  stated  terms of such gift certificate or store
credit, nor shall any person, firm, partnership, association  or  corpo-
ration who or which issues gift certificates or store credits, or who or
which  conducts  a "closing out sale" or "defunct business sale" as such
terms are defined in section five hundred eighty-one  of  this  chapter,
alter  the  term of a gift certificate or store credit after it has been
issued.
  2-a. (a) The terms and conditions  of  a  gift  certificate  shall  be
disclosed to the purchaser:
  (i)  on  a sign conspicuously posted stating "TERMS AND CONDITIONS ARE
APPLIED TO GIFT CERTIFICATES/GIFT CARDS"; or (ii)  conspicuously  stated
in an offer made by mail thus: "TERMS AND CONDITIONS ARE APPLIED TO GIFT
CERTIFICATES/GIFT CARDS".
  (b)  For  purchases via electronic, computer, or telephonic means, the
statement "TERMS AND CONDITIONS ARE APPLIED  TO  GIFT  CERTIFICATES/GIFT
CARDS"  shall  be  stated  prior  to the customer's purchase of the gift
certificate or  conspicuously  written  within  the  electronic  message
offering a gift certificate for purchase.
  (c)  All  advertisements  or  promotions  for  gift certificates shall
include a notice in like or similar term to the  following:  "TERMS  AND
CONDITIONS ARE APPLIED TO GIFT CERTIFICATES/GIFT CARDS".
  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. Additional terms and conditions including], but not be limit-
ed to, policies related to refunds, warranties,  changes  in  terms  and

A. 6052                             3

conditions, 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 printed document, provided that  a  toll  free
telephone number to access the additional terms and conditions is print-
ed on the gift certificate.
  3-a.  The requirements of subdivisions two-a and three of this section
shall not apply to a gift certificate that has no terms and conditions.
  3-b. Subparagraph (i) of paragraph (a) of subdivision  two-a  of  this
section shall not apply to gift certificates:
  (a)  sold  below  face  value or at a volume discount to employees, to
nonprofit and charitable organizations, or educational institutions  for
fundraising purposes; or
  (b)  distributed  to  a  consumer  or  employee pursuant to an awards,
rewards, loyalty, or promotional program without any consideration being
given in exchange for the gift certificate by the consumer or employee.
  3-c. Nothing in this section shall be construed to  prevent  unclaimed
funds related to gift certificates from becoming abandoned under section
thirteen hundred fifteen of the abandoned property law.
  4.  NO  GIFT CERTIFICATE OR STORE CREDIT SHALL HAVE AN EXPIRATION DATE
OR ANY OTHER DIMINUTION IN VALUE FOR FAILURE TO USE  SUCH  GIFT  CERTIF-
ICATE OR STORE CREDIT BEFORE A SPECIFIED DATE.
  5. Whenever there shall be a violation of this section, an application
may  be  made  by  the attorney general in the name of the people of the
state of New York to a court or justice having jurisdiction by a special
proceeding to issue an injunction, and upon notice to the  defendant  of
not  less than five days, to enjoin and restrain the continuance of such
violations; and if it shall appear to the satisfaction of the  court  or
justice  that  the  defendant  has,  in  fact, violated this section, an
injunction may be  issued  by  such  court  or  justice,  enjoining  and
restraining  any  further  violation,  without  requiring proof that any
person has, in fact, been  injured  or  damaged  thereby.  In  any  such
proceeding,  the  court  may  make allowances to the attorney general as
provided in paragraph six of subdivision  (a)  of  section  eighty-three
hundred  three  of  the civil practice law and rules and direct restitu-
tion. Whenever the court  shall  determine  that  a  violation  of  this
section  has  occurred, the court may impose a civil penalty of not more
than one thousand dollars for such violation.  In  connection  with  any
such  application,  the attorney general is authorized to take proof and
make a determination of the relevant facts and  to  issue  subpoenas  in
accordance with the civil practice law and rules.
  [5.  (a)  No retroactive fees shall be assessed against a gift certif-
icate.
  (b) No monthly service fees may be assessed against the balance  of  a
gift certificate prior to the thirteenth month of dormancy.
  (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.]
  6. The provisions of this section shall be exclusive and shall preempt
any  provisions  of  local law, ordinance or code, and no locality shall
impose requirements that are inconsistent with or more restrictive  than
those set forth in this section.
  S  2.  This  act shall take effect immediately and shall apply to gift
certificates or store credits sold or issued on and after such effective
date.