N.Y. General Business Law 396-I – Acceptance of unexpired gift certificates
§ 396-i. Acceptance of unexpired gift certificates. 1. (a) For the purposes of this section, the following terms shall have the following meanings:
Terms Used In N.Y. General Business Law 396-I
- Continuance: Putting off of a hearing ot trial until a later time.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Dependent: A person dependent for support upon another.
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
(1) "gift certificate" shall mean a certificate, electronic card, or other pre-funded record 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;
(2) "open loop gift certificate" shall mean a gift certificate redeemable at multiple, unaffiliated merchants or service providers; and
(3) "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 promotional purposes and (ii) the expiration date for the underlying funds.
(b) Gift certificate shall not include (i) an electronic payment device linked to a deposit account or which is covered by the exclusion set forth in 15 U.S.C. § 1693 L-1(a)(2)(D)(ii), (ii) a fare payment card or electronic payment device used to pay for travel on a public transportation authority system, or (iii) prepaid telephone calling cards regulated under § 92-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 Internal 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 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 customary price; provided that 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.
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 corporation, 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 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, 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".
2-b. (a) No person, firm, partnership, association or corporation shall sell a gift certificate to a purchaser unless the seller displays a conspicuous notice at or near where the gift certificate is displayed or at or near the physical location where the sale occurs, that (i) cautions the purchaser about prepaid card scams, and (ii) instructs the purchaser on what to do if they suspect they might be a potential victim of such a scam.
(b) The consumer protection division, as established in § 94-a of the executive law, shall create a model notice which sellers may use to comply with the requirements of this section and shall make such notice accessible to sellers including, but not limited to, posting such notice on the consumer protection division's website in a format available for sellers to print and display.
3. The terms and conditions of a gift certificate store credit shall be clearly and conspicuously stated thereon. Terms and conditions including, but not limited to, policies related to refunds, warranties, changes in terms and conditions, the expiration date, if any, the activation fee, if any, 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.
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 and subdivision five-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 § of the abandoned property law.
4. 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 § 8303 of the civil practice law and rules and direct restitution. 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 person, firm, partnership, association or corporation shall charge or assess, or sell or issue any gift certificate subject to, any activation fee, retroactive fee, redemption fee, service 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, other than an open loop gift certificate subject to an initial one-time activation or issuance fee reasonably related to the cost of the issuer issuing the open loop gift certificate and which shall in no event be in excess of nine dollars.
(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.
(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 underlying funds are subject to an expiration date, provided that a gift certificate may be subject to an expiration date which is not earlier than the later of nine years after the date on which the gift certificate was issued, or the date on which funds were last loaded. The terms of expiration of a gift certificate, if any, shall be clearly and conspicuously stated on such gift certificate.
5-b. A gift certificate, other than an open loop gift certificate or a promotional gift certificate, with a remaining value of less than five dollars may be redeemed upon request for its cash value.
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.