ASSEMBLY, No. 1635

STATE OF NEW JERSEY

214th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2010 SESSION

 


 

Sponsored by:

Assemblywoman  CONNIE WAGNER

District 38 (Bergen)

Assemblywoman  ELEASE EVANS

District 35 (Bergen and Passaic)

Assemblywoman  CARIDAD RODRIGUEZ

District 33 (Hudson)

 

 

 

 

SYNOPSIS

     Regulates expiration dates and dormancy fees for certain prepaid bank cards, such as mall gift cards.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel

  


An Act concerning certain prepaid bank cards and amending P.L.2002, c.14.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.  Section 1 of P.L.2002, c.14 (C.56:8-110) is amended to read as follows:

     1.  a.  A gift certificate or gift card sold after the effective date of [this amendatory act] P.L.    , c.   (C.        ) (pending before the Legislature as this bill) shall retain full unused value until presented in exchange for merchandise or money, or shall have any and all conditions and limitations, as permitted in paragraphs (1) through (3) of this subsection, disclosed to the purchaser of the gift certificate or gift card at the time of purchase as provided in subsection b. of this section.

     (1) In no case shall a gift certificate or gift card expire within the 24 months immediately following the date of sale.

     (2) No dormancy fee shall be charged against a gift certificate or [a] gift card within the 24 months immediately following the date of sale, nor shall one be charged within the 24 months immediately following the most recent activity or transaction in which the certificate or card was used.

     (3) A dormancy fee charged against a gift certificate or gift card as permitted by this subsection shall not exceed $2.00 per month.

     b.  The terms of any expiration date or dormancy fee applicable to a gift certificate or gift card, as permitted by subsection a. of this section, shall be disclosed to a consumer by:

     (1) written notice of the expiration date or dormancy fee , or both , printed in at least 10 point font, on the gift certificate or gift card, or the sales receipt for the certificate or card, or the package for the certificate or card; and

     (2) written notice, in at least 10 point font, on the gift certificate or gift card, or the sales receipt for the certificate or card, or the package for the certificate or card, of a telephone number which the consumer may call, for information concerning any expiration date or dormancy fee.

     c.  As used in this section:

     "Dormancy fee" means a charge imposed against the unused value of a gift card or gift certificate due to inactivity;

     "Gift card" means a tangible device, whereon is embedded or encoded in an electronic or other format a value issued in exchange for payment, which promises to provide to the bearer merchandise or money of equal value to the remaining balance of the device.


"Gift card" does not include a prepaid telecommunications or technology card, [prepaid bank card or] rewards card , or prepaid bank card, provided:

     (1) the expiration date associated with the prepaid bank card, if any, and a notice that dormancy or other fees may apply, if any are associated with the prepaid bank card, along with a toll-free customer service telephone number that consumers may use to access all fee information related to the card, including but not limited to dormancy fees, are printed on the card, or on a decal or sticker affixed to the card; and

     (2) all terms, conditions, and limitations are printed on the prepaid bank card, its packaging, or a decal or sticker affixed to the card, including but not limited to a description of all fees which are associated with the prepaid bank card ;

     "Gift certificate" means a written promise given in exchange for payment to provide merchandise or money in a specified amount or of equal value to the bearer of the certificate.  "Gift certificate" does not include a prepaid telecommunications or technology card, [prepaid bank card or] rewards card, or prepaid bank card, provided:

     (1) the expiration date associated with the prepaid bank card, if any, and a notice that dormancy or other fees may apply, if any are associated with the prepaid bank card, along with a toll-free customer service telephone number that consumers may use to access all fee information related to the card, including but not limited to dormancy fees, are printed on the card, or on a decal or sticker affixed to the card; and

     (2) all terms, conditions, and limitations are printed on the prepaid bank card, its packaging, or a decal or sticker affixed to the card, including but not limited to a description of all fees which are associated with the prepaid bank card;

     "Merchandise" means and includes any objects, wares, goods, commodities, services or anything offered, directly or indirectly, to the public for sale; 

     "Prepaid bank card" means a general use, prepaid card or other electronic payment device that is issued by a bank or other financial institution, or a licensed money transmitter, in a pre-denominated amount usable at multiple, unaffiliated merchants or at automated teller machines, or both, but shall not include a card issued by a retail merchant , a debit card linked to a deposit or loan account, or a payroll wage card;

     "Prepaid telecommunications or technology card" includes, but is not limited to: a prepaid telephone calling card; prepaid technical support card; or prepaid Internet disk distributed to or purchased by a consumer; and

     "Rewards card" means a card or certificate distributed by the issuer to a consumer pursuant to an awards, loyalty, rewards or promotional program, without any money or other consideration or thing of value by the consumer in exchange for the card or certificate.

     d.  Notwithstanding any other provision of this section to the contrary, a gift card which retains an unused value of $5 or less, after being presented in exchange for merchandise, shall be exchanged by the retail mercantile establishment, at the point of sale, for cash equaling the remaining unused value of the gift card.

(cf:  P.L.2005, c.254, s.1)

 

     2.    This act shall take effect on the 90th day after enactment, except that an action for a violation of P.L.1960, c.39 (C.56:8-1 et seq.) based upon the requirement as to font size of the notice required by section 1 of P.L.2002, c.14 (C.56:8-110) shall not accrue for a prepaid bank card issued on or before the 365th day after the date of enactment.

 

 

STATEMENT

 

     This bill clarifies that, for the purpose of the statute which regulates expiration dates and dormancy fees for gift cards and gift certificates, prepaid bank cards which disclose their expiration dates and dormancy fees are not included in the definition of “gift card” or “gift certificate.”  In order to be excluded:

·        the card’s expiration date and a notice that dormancy or other fees may apply, along with a toll-free customer service telephone number, consumers may use to access all fee information related to the card are printed on the card or a decal or sticker affixed to the card; and

·        all terms, conditions, and limitations are printed on the prepaid bank card, its packaging, or a decal or sticker affixed to the card, including but not limited to a description of all fees which are associated with the prepaid bank card.

     By excluding prepaid bank cards which make these disclosures from the existing gift card and gift certificate statutory requirements, these cards are not:

·        prohibited from expiring within 24 months immediately following the date of sale;

·        prohibited from charging a dormancy fee within 24 months immediately following the date of sale, or within 24 months immediately following the most recent activity or transaction in which the card is used;

·        limited to charging no more than $2.00 per month for the dormancy fee; or

·        required to make certain disclosures.

     The bill also specifies that payroll wage cards and debit cards linked to deposit or loan accounts are not included in the definition of a “prepaid bank card.”  In addition, the bill requires merchants to exchange the unused value of a gift card for cash when it is used for a purchase and $5 or less remains on the card.