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.