NY State Senate Bill 2019-S5771A

Archive: Last Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Dec 28, 2020	committed to rules
Mar 11, 2020	advanced to third reading
Mar 10, 2020	2nd report cal.
Mar 04, 2020	1st report cal.580
Jan 08, 2020	referred to consumer protection
Jan 03, 2020	print number 5771a
Jan 03, 2020	amend and recommit to consumer protection
May 14, 2019	referred to consumer protection

Votes

- Mar 4, 2020 - Consumer Protection Committee Vote
  S5771A
  
  5
  
  Aye
  
  2
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Consumer Protection Committee Vote: Mar 4, 2020
      
      aye (5)
      
      Comrie
      
      Kavanagh
      
      Myrie
      
      Ramos
      
      Thomas
      
      nay (2)
      
      Jacobs
      
      Tedisco

Bill Amendments

Original

A (Active)

2019-S5771 - Details

See Assembly Version of this Bill:: A8652
Current Committee:: Senate Rules
Law Section:: General Business Law
Laws Affected:: Amd §396-i, Gen Bus L

2019-S5771 - Summary

Relates to fees for gift cards; limits the amount a merchant may charge for the gift card; and prohibits the expiration of such gift cards.

2019-S5771 - Sponsor Memo

                                
 
BILL NUMBER: S5771

SPONSOR: MAYER
 
TITLE OF BILL:  An act to amend the general business law, in relation
to fees for gift cards

 
PURPOSE OR GENERAL IDEA OF BILL:

To prohibit fees and expiration dates on gift cards and gift certif-
icates and to provide that gift cards and gift certificates may be
redeemed in cash when the remaining value is less than twenty dollars.

 
SUMMARY OF PROVISIONS:

Section 1 amends subdivision 1, 3, 5 and 5-a of section 396-i of the
general business law and adds a new section 5-b to make clear that the
definition of "gift certificate" includes gift cards, remove references
to expiration date and fees, to prohibit the issuance of gift certif-
icates and gift cards that decline in value over time, to prohibit the
issuance of gift cards and gift certificates with expiration dates, and
to provide that gift certificates and gift cards with a remaining value

of less than twenty dollars may be redeemed for cash.

Section 2 sets an effective date of January 1, 2020.

 
JUSTIFICATION:

Many gift cards are sold with a variety of fees attached that can
significantly reduce their value. These include, but are not limited to,
activation fees paid at the time of purchase and dormancy fees for fail-
ing to use a gift card for a certain period of time. The Federal Credit
CARD Act of 2009 placed some restrictions on gift card fees by prohibit-
ing dormancy fees unless a gift card is dormant for at least twelve
months and by limiting the frequency of periodic fees to no more than
once a month. The CARD Act also prohibits expiration dates prior to five
years after issuance.

However, permitted fees on gift cards can still be substantial. Most
states have enacted laws to protect consumers by further limiting such
fees. New York lags behind other states in addressing this issue.

This bill protects consumers from excessive fees on gift cards by
prohibiting all fees on gift cards and prohibiting gift cards that
decline in value over time. In addition, to further eliminate loss of
value to consumers, this bill prohibits expiration dates on gift cards
and gift certificates and allows for redemption when the remaining
balance is less than twenty dollars.

 
PRIOR LEGISLATIVE HISTORY:

None

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect on January 1, 2020.

2019-S5771 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5771
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               May 14, 2019
                                ___________
 
 Introduced  by  Sen.  MAYER  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Consumer Protection
 
 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:

   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 subdivi-
 sion 5-b is added to read as follows:
   1.  For  the purposes of this section, "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] CERTIF-
 ICATE, 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.  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  Inter-
 nal  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

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11662-02-9

 S. 5771                             2
 
 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  custom-
 ary  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 POST-PURCHASE 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 certif-
 icate  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
 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 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 CARD WITH A REMAINING VALUE OF TWENTY DOLLARS OR LESS  MAY
 BE REDEEMED FOR ITS CASH VALUE.
   § 2. This act shall take effect immediately.

co-Sponsors

View additional co-sponsors

2019-S5771A (ACTIVE) - Details

See Assembly Version of this Bill:: A8652
Current Committee:: Senate Rules
Law Section:: General Business Law
Laws Affected:: Amd §396-i, Gen Bus L

2019-S5771A (ACTIVE) - Summary

Relates to fees for gift cards; limits the amount a merchant may charge for the gift card; and prohibits the expiration of such gift cards.

2019-S5771A (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S5771A

SPONSOR: MAYER
 
TITLE OF BILL:

An act to amend the general business law, in relation to fees for gift
cards

 
PURPOSE OR GENERAL IDEA OF BILL:

To prohibit fees and expiration dates on gift cards and gift certif-
icates and to provide that gift cards and gift certificates may be
redeemed in cash when the remaining value is less than five dollars.

 
SUMMARY OF PROVISIONS:

Section 1 amends subdivision 1, 3, 5 and 5-a of section 396-i of the
general business law and adds a new section 5-b to make clear that the
definition of "gift certificate" includes gift cards, remove references
to expiration date and fees, to prohibit the issuance of gift certif-
icates and gift cards that decline in value over time, to prohibit the

issuance of gift cards and gift certificates with expiration dates, and
to provide that gift certificates and gift cards with a remaining value
of less than five dollars may be redeemed for cash.

Section 2 sets an effective date of January 1, 2020.

 
JUSTIFICATION:

Many gift cards are sold with a variety of fees attached that can
significantly reduce their value. These include, but are not limited to,
activation fees paid at the time of purchase and dormancy fees for fail-
ing to use a gift card for a certain period of time. The Federal Credit
CARD Act of 2009 placed some restrictions on gift card fees by prohibit-
ing dormancy fees unless a gift card is dormant for at least twelve
months and by limiting the frequency of periodic fees to no more than
once a month. The CARD Act also prohibits expiration dates prior to five
years after issuance.

However, permitted fees on gift cards can still be substantial. Most
states have enacted laws to protect consumers by further limiting such
fees. New York lags behind other states in addressing this issue.

This bill protects consumers from excessive fees on gift cards by
prohibiting all fees on gift cards and prohibiting gift cards that
decline in value over time. In addition, to further eliminate loss of
value to consumers, this bill prohibits expiration dates on gift cards
and gift certificates and allows for redemption when the remaining
balance is less than five dollars.

 
PRIOR LEGISLATIVE HISTORY:

None.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect one year after it shall have become a law.

2019-S5771A (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5771--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               May 14, 2019
                                ___________
 
 Introduced  by  Sen.  MAYER  -- read twice and ordered printed, and when
   printed to be committed to the Committee  on  Consumer  Protection  --
   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 ASSEM-
 BLY, 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 subdivi-
 sion 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,  CRED-
 IT, 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.
                                                            LBD11662-03-9

 S. 5771--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  regu-
 lated under section ninety-two-f of the public service law. Gift certif-
 icate  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); depend-
 ent  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 regu-
 lations, 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 conspicuous-
 ly 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 certif-
 icate 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

 S. 5771--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 conspicu-
 ously 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.

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Senate Bill S5771A

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

Mar 4, 2020 - Consumer Protection Committee Vote

Consumer Protection Committee Vote: Mar 4, 2020

Bill Amendments

2019-S5771 - Details

2019-S5771 - Summary

2019-S5771 - Sponsor Memo

2019-S5771 - Bill Text download pdf

co-Sponsors

2019-S5771A (ACTIVE) - Details

2019-S5771A (ACTIVE) - Summary

2019-S5771A (ACTIVE) - Sponsor Memo

2019-S5771A (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S5771A

Share this bill

Sponsored By

Shelley B. Mayer

Archive: Last Bill Status - In Senate Committee Rules Committee

Bill Amendments

2019-S5771 - Details

2019-S5771 - Summary

2019-S5771 - Sponsor Memo

2019-S5771 - Bill Text download pdf

co-Sponsors

Joseph P. Addabbo Jr.

Robert Jackson

Liz Krueger

Zellnor Myrie

2019-S5771A (ACTIVE) - Details

2019-S5771A (ACTIVE) - Summary

2019-S5771A (ACTIVE) - Sponsor Memo

2019-S5771A (ACTIVE) - Bill Text download pdf

Comments