S T A T E O F N E W Y O R K
________________________________________________________________________
8550
2015-2016 Regular Sessions
I N A S S E M B L Y
October 30, 2015
___________
Introduced by M. of A. ORTIZ, GALEF, PEOPLES-STOKES -- Multi-Sponsored
by -- M. of A. CAHILL, CLARK, FARRELL, GOTTFRIED, HOOPER -- 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
Revenue Code and its implementing regulations, individuals may pay
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03575-01-5
A. 8550 2
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
conditions, assignment and waiver shall be conspicuously printed: (a) on
A. 8550 3
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.